In recent years, the increasing interest of financial institutions in blockchain technology and crypto-related products has been observed. This is due to the potential of blockchain technology to make trade execution and settlements more efficient. A major token-based blockchain project, Avalanche (AVAX) has recently launched its Evergreen subnet, "Spruce", which is intended for traditional finance (TradFi) firms to make use of this network for testing and exploring different applications and assets. A notable feature of the Spruce subnet is that it is a permissioned blockchain with a valueless token mechanism, which means financial institutions can experiment and experience the full performance of Avalanche’s architecture securely. T.Rowe, Wisdom Tree, Wellington Cumberland are some of the participating institutions in the Spruce subnet.

The primary benefits of using Spruce are expected to be high-speed settlement and transaction execution, as well as rigid security. Decentralized finance (DeFi) applications are being used to execute foreign exchange and interest rate swaps, and this is expected to reduce transaction costs and improve liquidity. In addition to Spruce, Avalanche also has Intain subnet, which is intended to be used as a tokenized asset-backed security (ABS) platform, and Deloitte subnet, enabling efficient Foreign Exchange Management Act (FEMA) fund disbursements.

Therefore, the entry of these TradFi companies in the blockchain segment could provide an invaluable experience and knowledge for the understanding and implementation of smart contract technology and its applications. This could be seen as a major step towards greater mainstream adoption for the blockchain technology.



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