Citibank is Exploring Issuing Stocks on the Blockchain

Citibank, a leading financial services firm based in the United States, is currently considering issuing stocks on the blockchain and is experimenting with breaking into tokenized securities on Avalanche. 

As earlier reported by TheCoinRise, Avalanche has become a favorite for firms that aim to discover tokenization of real-world assets. Blockticity, a startup that focuses on providing certificates of authenticity for possessions through blockchain, minted NFTs on AVAX to prove the authenticity of about $275 million worth of psychedelic mushrooms, hemp, and kratom.

Citibank Up for Innovation

According to a Bloomberg report, Citibank is experimenting with tokenized securities on the blockchain and aims to increase the adoption of distributed ledger technology (DLT) on Wall Street.

Further, after the results of the “simulation” come out, Citibank seeks to determine whether it will offer related blockchain-based services in the coming weeks or roll back the arrangements for the same. 

Citibank Collaborates with Multiple Firms

As per the Bloomberg report, Citibank collaborated with two firms, Wellington Management and WisdomTree, to initiate the “proof of concept” for its new program. It is important to note that WisdomTree is one of the firms to apply for a spot Bitcoin ETF with the SEC in the United States.

In the most recent trial by Citibank, a hypothetical private equity fund from Wellington Management underwent tokenization on Avalanche. This blockchain platform, featuring AVAX as its native coin, currently holds the position of the 10th largest cryptocurrency based on market capitalization, CoinMarketCap shows.

Additionally, Citibank also recently partnered with digital asset custody firm Metaco, which was acquired by Ripple for $250 million in May 2023. The two teamed up to start creating and testing digital asset custody services. They sought to build a platform that enables clients to store and settle digital assets in a secure way.

Results from the Test

Citibank revealed that Wellington’s fund incorporates distribution rules within its smart contract, outlining how tokens are allocated among WisdomTree clients. 

Additionally, they experimented with using a private fund token as collateral in an automated lending contract with the Depository Trust & Clearing Corporation’s crypto unit, as confirmed by Puneet Singhvi, Citi’s institutional head of digital assets. 

This simulation demonstrates the feasibility of issuing and safeguarding tokenized assets for clients in a controlled environment, ensuring compatibility with traditional banking systems. Singhvi emphasizes that this paves a clear path for institutions to integrate blockchain in a regulatory-compliant manner.

Standard Chartered’s Tokenization Platform

As per another report from TheCoinRise, SC Ventures, the investment arm of Standard Chartered Bank, recently announced the debut of a new asset tokenization platform dubbed Libeara. 

It is clear that asset tokenization has attracted the attention of banking institutions around the globe.