"Citibank acted quickly, this is what we want."
In order to increase the use of distributed ledger technology on Wall Street, multinational financial services giant Citibank announced that they are experimenting with token securities on the blockchain.
Citibank has signed an agreement with Wellington Management and WisdomTree to start a proof of concept for the program and the latest test marks Wellington's private equity fund Avalanche (AVAX).
According to the bank, fund distribution rules have been incorporated into the Wellington fund's underlying smart contract that will determine how tokens are divided between WisdomTree clients.
It is also testing how private fund tokens can be used as loan collateral in automated loan contracts with crypto unit Depository Trust & Clearing Corporation, commented CitiBank's Head of Digital Assets Puneet Singhvi.
While the issuance and custody of tokenized assets for customers in a regulated environment will take place including providing a clear roadmap to explain how institutions can use blockchain in a regulatory compliant manner.
Last month, a group of former executives from Citigroup announced its plan to issue Bitcoin Depository Receipts (BTC DR) to global institutional investors that would offer clients exposure to BTC without requiring registration under the Securities Act of 1933.
While the bank in September 2023 also made history as the first digital custodian of the BondbloX Bond Exchange to leverage blockchain to allow access to bonds
