T Rowe Price Associates and WisdomTree are among the FS firms testing the Avalanche blockchain for executing FX and interest rate swaps.
Wellington Management and Cumberland have also joined the Avalanche Evergreen Subnet, "Spruce".
The Spruce testnet is meant to enable buy- and sell-side institutions to engage with public blockchain infrastructure in a low-risk, low barrier-to-entry manner. Using valueless tokens allows them to experience the full functionality of Avalanche’s Subnet architecture without putting capital at risk.
The firm will use DeFi applications on Spruce to execute FX and interest rate swaps. Future phases of Spruce will welcome additional third-party applications, assets, and processes, including the exploration of tokenised equity and credit issuance, trading, and fund management.
Upon onboarding, firms’ wallets are issued non-transferable tokens indicating they’ve passed KYC/KYB checks; in addition, their wallet addresses are embedded in an allowlist, which monitors access at the chain level. Smart contract deployers who have integrated key infrastructure and applications also undergo the onboarding process for their activity on Spruce.
“Participating in the Avalanche Spruce testnet presents a valuable opportunity to deepen our understanding and analysis of smart contract technology and the potential applications of public, permissioned blockchains in financial markets,” says Blue Macellari, head, digital assets strategy, T Rowe Price Associates.