Citi is launching a blockchain-based platform to let wealthy and institutional clients trade tokenized shares of private companies, the Wall Street Journal reports. The offering, which initially targets non-U.S. investors, uses tokenized depositary receipts issued and authorized by Citi — with the bank also acting as custodian — to give regulated exposure to private-company equity without transferring direct share ownership.
Why it matters
- Demand for late-stage private stakes has surged as high-value firms such as SpaceX and Anthropic remain private longer, leaving investors hungry for alternatives to IPOs and informal secondaries.
- By packaging private-company exposure as tokenized depositary receipts on blockchain rails, Citi aims to provide faster settlement, clearer portfolio tracking and a more controlled, bank-supervised route into private markets.
Key details
- Initial rollout will serve foreign investors; Citi plans to expand access over time and could bring the product to U.S. clients if regulators allow.
- The service targets accredited wealth and institutional clients; Citi is reportedly in talks with several large private companies but has not named them.
- Tokens represent depositary receipts tied to private-company shares and are issued and custodied by Citi, not direct fractional ownership of the underlying stock.
Market context and precedent
- Citi has run tokenized deposit pilots and long-studied blockchain use cases for securities and settlement. Its recent research placed today’s tokenized market around $17 billion with a base-case projection to reach $5.5 trillion by 2030.
- Major banks are moving similarly: reports say JPMorgan, Citi and others are exploring a tokenized deposit network that could arrive as early as 2027.
Risks and open questions
- Tokenized private shares are still nascent: liquidity, price discovery, issuer approvals and regulatory treatment remain unresolved.
- Past marketplace issues highlight these dangers — for example, some platforms previously issued tokenized products tied to companies that said they hadn’t approved them.
- Citi’s model seeks to mitigate these concerns through bank issuance, custody and regulated client channels rather than open retail markets, but regulatory clarity will be crucial.
Bottom line
Citi’s rollout signals tokenization moving from experiments to practical Wall Street products. The bank is betting that regulated tokenized structures can open late-stage private opportunities to eligible investors while addressing trust and operational gaps in informal secondary markets. Watch regulatory responses, issuer buy-in, and whether liquidity and pricing mechanics mature as adoption grows.
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