Citi financing digital asset management firm Xalts
In the rapidly evolving digital asset landscape of 2025, institutional participation is on the rise, driven by increased regulatory clarity and a growing focus on tokenized funds and cryptocurrency ETFs. This shift is evident in the latest developments, including the White House's efforts to create a comprehensive federal regulatory framework for digital assets.
One of the key players in this space is xalts, a digital asset manager co-founded by Ashutosh Goel and Supreet Kaur this year. Goel serves as the Chief Investment Officer, while Kaur holds the position of COO. The company aims to release ETFs and mutual funds for cryptocurrencies, with the next leg of growth in digital assets expected to be driven by institutional participation, as stated by Goel.
xalts has already secured investments from Accel India and others, and plans to build a team of 30 by the end of this year. The company's offices are located in Hong Kong, Singapore, Dubai, and Geneva.
xalts' primary focus is on providing accessible products for institutions that cannot directly access the crypto ecosystem. Kaur's goal for xalts is to launch such products, bridging the gap between traditional finance and the digital asset space.
The company's platforms are designed for tokenizing structured products and tokenized funds, reflecting the growing trend towards tokenization in the digital asset industry.
Citi Ventures, the venture capital arm of Citi, has recently invested in xalts, expressing support for the company's vision of creating innovative products for institutional investors' growing appetite for efficient and robust crypto-access investments. This investment marks Citi Ventures' first foray into a digital asset manager.
The regulatory environment for digital assets is undergoing significant changes, with the Digital Asset Market Clarity Act of 2025 (CLARITY) proposing a regulatory split between the SEC and CFTC oversight based on asset characteristics. This aims to reduce regulatory overlap and arbitrage, supporting a more efficient market structure for digital assets, including tokenized funds and ETFs.
The GENIUS Act, signed into law on July 18, 2025, establishes the first-ever federal regulatory framework for stablecoins, which plays into the modernization of payments infrastructure and supports stablecoin-backed products like tokenized funds and ETFs.
As regulatory clarity improves, major financial institutions are preparing to launch tokenized funds and cryptocurrency ETFs, driving competition in the digital asset investment space. This institutional interest is pushing banks and nonbank entities to form partnerships and innovate custody solutions to support such products.
However, global regulatory challenges remain, particularly with anti-money laundering (AML) and combating the financing of terrorism (CFT) standards for virtual assets. The financial sector sees rising illicit activity involving stablecoins and decentralized finance (DeFi), prompting further collaboration for regulatory improvements.
In conclusion, the competitive landscape for tokenized funds and cryptocurrency ETFs in 2025 is shaped by newly enacted U.S. federal laws and recommended frameworks promoting regulatory clarity and safety, enabling greater institutional participation and innovation amid ongoing efforts to address compliance challenges internationally.
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