Citigroup Explores Tokenization Of Private Funds With Proof Of Concept For Enhanced Operational Efficiencies

Citigroup, Inc. C shares are trading higher on Wednesday.

The company said it completed a proof of concept on tokenization of private funds along with Wellington Management and WisdomTree.

The proof of concept found that smart-contract capabilities could deliver new functionality and operational efficiencies currently unavailable with traditional assets. 

These new functionalities enable buy- and sell-side institutions to engage with distributed ledger infrastructure in a low-risk, low-barrier-to-entry manner that is consistent with regulations.

“Smart contracts and blockchain technology can enable enhanced rule-enforcement at an infrastructure-level, allowing data and workflows to travel with the asset,” stated Nisha Surendran, Emerging Solutions Lead for Citi Digital Assets. 

As part of the experiment, Citi also evaluated multiple scenarios of transfers using smart contracts relying on simulated identity credentials issued by WisdomTree and using a private fund token as collateral in an automated lending contract with DTCC Digital Assets (formerly Securrency).

“We believe that by testing the tokenization of private assets, we are exploring the feasibility to open-up new operating models and create efficiencies for the broader market,” Surendran added.

Price Action: C shares are trading higher by 1.93% to $53.78 on the last check Wednesday. 

Photo via Shutterstock