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Financial market firms T. Rowe Price Associates, WisdomTree, Wellington Management, and Cumberland have joined an Avalanche (AVAX<\/a>) subnet to test the idea of blockchain-based foreign exchange, according to an announcement<\/a> from the Avalanche team. The new subnet is called \u201cSpruce,\u201d and is part of Avalanche\u2019s Evergreen Subnet ecosystem.<\/p>\n Following last week\u2019s Avalanche Evergreen announcement, today marks the launch of the Spruce Subnet!<\/p>\n Institutional partners including @TRowePrice<\/a>, @WisdomTreeFunds<\/a>, @Wellington_Mgmt<\/a> & @CumberlandSays<\/a> will use Spruce to test public blockchain applications. https:\/\/t.co\/1KLzxcUCSB<\/a> pic.twitter.com\/xvaUmKO3BV<\/a><\/p>\n \u2014 Avalanche (@Avax) April 12, 2023<\/a><\/p><\/blockquote>\n According to the announcement, institutions will initially use \u201cvalueless tokens\u201d on Spruce to ensure they can conduct foreign exchange, or forex, transactions without losing capital. Interest-rate swaps will also be tested early on. Over the long run, successful tests will allow these firms to experiment with further attempts at blockchain settlement, including \u201cthe exploration of tokenized equity and credit issuance, trading, and fund management.\u201d<\/p>\n The announcement said that Spruce offers compliance features to help keep institutions within the parameters of the law. Firms that want to use it must first pass Know Your Customer (KYC) verifications, and once they complete this process, they receive non-transferable tokens, or NTTs, identifying them on the network. Their wallet addresses are also whitelisted \u201cat the chain level\u201d after verification.<\/p>\n Will Peck, head of digital assets at WisdomTree, said that he believes Spruce will be an important step in bringing greater efficiency to traditional financial transactions:<\/p>\n \u201cWe believe tokenization and blockchain will play an important role in financial services going forward. Avalanche Spruce provides an opportunity to further explore the potential efficiencies and benefits of on-chain trading and settlement with other financial institutions. We are looking forward to experimenting in this EVM-based testing environment.\u201d<\/p><\/blockquote>\n On April 6, Avalanche announced the launch<\/a>\u00a0of\u00a0the \u201cEvergreen\u201d subnet protocol, which allows institutions to create customized blockchains with compliance features. At the time, a representative from Ava Labs said these subnets were needed because previous solutions, such as Corda and Hyperledger, were not interoperable enough for the needs of large institutions.<\/p>\n Related: <\/strong>Deutsche Boerse, Swisscom Settle Securities with Corda and Hyperledger<\/strong><\/a><\/em><\/p>\n Spruce is one of two Avalanche Evergreen subnets launched since the protocol was released and listed on the Avalanche website. Intain, an Evergreen subnet focused on structured finance, is the other.<\/p>\n A January joint study from Uniswap and Circle argued that the\u00a0cost of forex could be reduced<\/a>\u00a0by\u00a0as much as 80% by putting transactions on a blockchain network. Experts such as Ralf Kubli of the Casper Foundation have argued that tokenization may help to prevent<\/a> a future financial crisis.<\/p>\n<\/div>\n\n