Citi Launches Digital Depositary Receipts for Private Shares

Citi has launched a new Digital Depositary Receipts product designed to provide institutional-grade access to private company shares [1]. The model allows the bank to act as both the issuer and custodian for tokenized assets, aiming to increase transparency and efficiency in private markets without requiring a public listing [1].

Key takeaways

• Citi is the first global financial services company to issue and act as custodian for tokenized depositary receipts representing private company shares [1].
• The platform utilizes blockchain infrastructure operated by SIX to facilitate the tokenization, settlement, and safekeeping of these assets [1].
• An inaugural transaction was completed between Kaleido, a Citi portfolio company, and investors within Citi’s Wealth business [1].
• The solution is designed to maintain existing ownership rights and operational safeguards while integrating into current Wealth platforms [1].

Expanding Private Market Access

The new offering applies Citi Issuer Services’ traditional depositary receipt model to private market shares [1]. By leveraging blockchain infrastructure provided by SIX, the bank intends to create a more scalable and transparent environment for capital formation [1]. According to Citi, this innovation allows for the distribution and transfer of private assets without the need for companies to undergo a public listing process or alter their underlying ownership structures [1].

The inaugural transaction involved Kaleido, an institutional tokenization and digital asset platform, with support from Citi’s Secondary Private Markets business [1]. This pilot represents an effort to integrate digital assets into the bank's existing Wealth platforms, aiming to provide clients with new investment opportunities while preserving the rigorous standards and protections associated with traditional financial markets [1].

Why it matters

As private markets continue to expand, Citi’s leadership suggests there is a growing demand for trusted and diverse access points for investors [1]. The bank views this development as an incremental step toward leveraging digital capabilities to enhance client optionality [1]. By focusing on interoperability, the firm aims to support a broader range of issuers and investors as the infrastructure for digital assets continues to evolve [1]. The project is intended to reduce complexity in private market transactions and provide a robust model for institutional-grade investment [1].