T. Rowe will test avalanche blockchain in a renewed push on Wall Street
T. Rowe Price Associates is among a group of Wall Street firms to test drive a new version of the Avalanche blockchain in a renewed push to explore how the technology can make financial transactions more efficient.
T. Rowe Price Associates is among a group of Wall Street firms to test drive a new version of the Avalanche blockchain in a renewed push to explore how the technology can make financial transactions more efficient.
The firm, along with Cumberland, WisdomTree Inc. and Wellington Management Group LLC, will begin experimenting with financial trading and settlement on the blockchain with a new application called Spruce, according to a press release. The measures are similar to those of KKR & Co. Inc. and Apollo Global Management Inc., which have put some of their funds into blockchains, and JPMorgan Chase & Co., which executed its first public blockchain trade last year.
The firm, along with Cumberland, WisdomTree Inc. and Wellington Management Group LLC, will begin experimenting with financial trading and settlement on the blockchain with a new application called Spruce, according to a press release. The measures are similar to those of KKR & Co. Inc. and Apollo Global Management Inc., which have put some of their funds into blockchains, and JPMorgan Chase & Co., which executed its first public blockchain trade last year.
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“This is an opportunity for us to really start exploring … in an extremely low-risk environment where there is no capital at risk,” Blue Macellari, head of digital asset strategy at T. Rowe Price, said in an interview. DeFi, as it currently exists, there are many barriers to institutional participation, including compliance, she said.
The partnering firms plan to test Spruce’s valueless token system on currency and interest rate swaps, which could have potential cost savings and reduced risk associated with decentralized finance, known as DeFi.
A report earlier by Uniswap Labs and USD Coin stablecoin issuer Circle said that moving the $7.2 trillion global currency market onto the blockchain would reduce the cost of global money transfers by 80% and eliminate settlement risk.
“Tokens are not of value, but it allows us both to understand the regulatory and economic requirements to perform transactions on chain,” John Wu, president of Ava Labs, the lead developer behind Avalanche, said in an interview. Spruce is enabling anyone in “regulated buy-side and sell-side institutions” to “basically experiment with chain financing.”
Within Spruce’s “testnet” version, financial institutions’ digital wallets will receive non-transferable tokens that prove they have passed verification checks such as the Know Your Customer process, according to the release.
Spruce is Ava Lab’s latest effort to provide institutions with tools for purpose-built blockchain networks as part of Avalanche’s Evergreen subnet, which is like a smaller version of Avalanche’s main blockchain. The purpose of the Evergreen network is to help institutions overcome some of the challenges of adopting blockchain technology, particularly in decentralized finance.
