Citi puts private company shares on the blockchain

Citigroup has taken a significant step in the tokenization of traditional financial assets, launching a product called Digital Depositary Receipts (DDRs) that places private company shares on the blockchain. The bank acts as both issuer and custodian, a structure it describes as a first for a global bank of its scale.

How the product works

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. SIX Digital Exchange (SDX) is Switzerland's first and only distributed ledger-based Central Securities Depository, licensed and supervised by FINMA, Switzerland's financial market regulator.

Investors own the depositary receipt rather than the underlying shares directly, while Citi acts as both issuer and custodian. The bank argues the approach could make private-market investing simpler and more transparent than existing structures, which often rely on special-purpose vehicles and multiple intermediaries.

The first publicized transaction involved Kaleido, an institutional tokenization and digital-asset platform. A SIX document identifies the instrument as an unsponsored digital depositary receipt issued by Citibank, N.A., representing deposited voting common stock of Kaleido, Inc., under ISIN CH1507409733. The Kaleido DDRs were not registered under the U.S. Securities Act and can be offered or transferred only through offshore Regulation S transactions to non-U.S. persons. Holders must be accredited investors, and the DDR is not the same as holding the underlying shares.

The market opportunity and what comes next

The platform targets a $75 billion late-stage pre-IPO equity market that has swelled as companies including SpaceX and Anthropic delay public debuts, leaving institutional capital with no clean secondary-market route into those positions. Trades in late-stage private equity currently involve manual, weeks-long processing and fragmented cap-table records. On SDX's platform, according to the bank, those trades execute near-instantaneously.

The platform is initially restricted to foreign investors, with U.S. access planned for a later phase once regulatory conditions allow. 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. Citi says it is already in discussions with some of the largest private companies to participate.

The ambition behind the product is considerable. Citi's own Tokenization 2030 report puts the base-case size of tokenized real-world assets at $5.5 trillion by 2030, up from $17 billion today, with private markets, real estate, and money-market funds leading the growth. The range runs from $2.7 trillion to $8.2 trillion, depending on regulatory velocity.

Sources:
CoinDesk: Citi opens new route into private markets with tokenized share offering
Citigroup Press Release: Citi and SDX Join Forces to Unlock Access to Tokenized Private Market Assets
Bitcoin.com News: Wall Street's Next Onchain Test Gives Citi Clients Tokenized Access to Private Shares