Citi opens new route into private markets with tokenized share offering

Citigroup is launching a new way for wealthy and institutional investors to buy stakes in private companies using blockchain technology as part of a broader push by major banks to bring traditional financial assets onto digital asset networks.

The bank on Thursday unveiled what it called Digital Depositary Receipts, a product that allows investors to gain exposure to private company shares through blockchain-based securities issued and held by Citi.

The launch comes as many fast-growing companies are waiting longer to go public, leaving investors with fewer ways to access sought-after private firms. At the same time, demand for private-market investments has surged as investors look for opportunities beyond public stocks.

"Our focus with Digital Depositary Receipts is to continue to expand responsible access to digital asset markets," a Citi spokesperson told CoinDesk.

The product debuted with a transaction involving Kaleido, a digital asset and tokenization company backed by Citi Ventures and investors in Citi's wealth management business.

The structure is based on depositary receipts, a longstanding financial product that allows investors to gain exposure to shares through a bank-issued security. Citi has adapted that model for private companies and recorded the securities on blockchain infrastructure operated by Swiss market operator SIX.

The result is a digital version of a traditional financial instrument. Investors own the depositary receipt rather than the underlying shares directly, while Citi acts as both issuer and custodian.

The bank argued the approach could make private-market investing simpler and more transparent than some existing structures, which often rely on special-purpose vehicles and multiple intermediaries.

The launch is part of a larger effort by major financial institutions to tokenize traditional assets.

Tokenization refers to representing real-world assets such as stocks, bonds or bank deposits as digital tokens that can move across blockchain networks.

Supporters say tokenized assets could eventually reduce settlement times, lower costs and allow markets to operate around the clock.

Citi has been among the banks pushing that transition. Earlier this month, Citi joined several of the largest U.S. banks in announcing plans to develop a shared tokenized deposit network through The Clearing House by mid-2027. The system would convert traditional bank deposits into blockchain-based tokens while keeping funds inside the regulated banking system.

For now, Citi's private-share product operates on infrastructure provided by SIX. The bank said it plans to expand the offering over time and eventually support public blockchain networks, potentially allowing a wider range of investors and institutions to participate.