T Rowe Price Associates and WisdomTree are among the financial services firms currently testing the Avalanche blockchain for the execution of foreign exchange (FX) and interest rate swaps. Wellington Management and Cumberland have also joined the Avalanche Evergreen Subnet, named “Spruce.”
The Spruce testnet is designed to allow buy- and sell-side institutions to engage with public blockchain infrastructure in a low-risk environment with minimal barriers to entry. By utilizing valueless tokens, these firms can fully explore the functionalities of Avalanche’s Subnet architecture without risking capital.
The participating firms plan to leverage decentralized finance (DeFi) applications on Spruce to execute FX and interest rate swaps. Future versions of Spruce are expected to incorporate additional third-party applications, assets, and processes, potentially including tokenized equity and credit issuance, trading, and fund management.
Upon onboarding, firms receive non-transferable tokens that indicate they have passed Know Your Customer (KYC) and Know Your Business (KYB) checks. Their wallet addresses are also added to an allowlist to monitor access at the chain level. Additionally, smart contract deployers that have integrated essential infrastructure and applications undergo a similar onboarding process for their activities 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,” stated Blue Macellari, head of digital assets strategy at T Rowe Price Associates.