Wellington Management, WisdomTree and Citi have announced the completion of a proof of concept (PoC) for the tokenisation of private funds.
The pilot involved a private equity fund issued by Wellington with ABN Amro as the investor. The underlying fund distribution rules were encoded into a smart contract and embedded in the token transferred to hypothetical clients of WisdomTree.
As the asset servicer, Citi also tested multiple scenarios of transfers using smart contracts relying on simulated identity credentials issued by WisdomTree and a private fund token as collateral in an automated lending contract with DTCC Digital Assets (formerly Securrency).
The complex and heavily manual infrastructure of the private assets market has made it a prime candidate for the use of tokenisation based on the assumption that it will ensure greater automation and an improved compliance and control environment for issuers, distributors and investors.
“We believe blockchain-enabled finance is the future of the industry, and this PoC showcases the ability to explore the transferability of tokenised funds and related compliance in different markets,” said Maredith Hannon Sapp, head of business development, digital assets, at WisdomTree.
“This will inform future in-production use cases of how blockchain technology and smart contracts can be used in on-chain transactions.”
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