Citi Launches Tokenized Private Share Product for Wealthy Investors

Citigroup on Thursday launched a product called Digital Depositary Receipts, a blockchain-based security that gives wealthy and institutional investors a way to own stakes in private companies.

The instrument adapts depositary receipts, a decades-old structure where a bank issues securities representing shares held in custody. In this version, Citi records the receipt on blockchain infrastructure run by SIX, a Swiss market operator. The bank holds the private shares and issues the digital token. Investors own the token, not the underlying equity.

“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 tokenization firm backed by Citi Ventures and investors in Citi’s wealth management business.

The launch comes as private companies delay IPOs and investor demand for private-market access grows. Citi argued the approach simplifies the process compared with special-purpose vehicles and the multiple intermediaries that often gate exposure.

The immediate impact is narrower than a full tokenization of private equity. The product targets qualified buyers, not retail. The blockchain is permissioned, run by SIX, not a public network. Citi said it plans to eventually support public blockchains but gave no date. The structure does not eliminate illiquidity in the underlying shares. It improves the record-keeping and settlement layer.

The depositary receipt can be cancelled, with Citi delivering the shares or an equivalent cash amount. If the private company’s shares are hard to price or sell, Citi bears that risk. The bank’s balance sheet is the backstop.

The launch fits into a larger effort by major banks to tokenize assets. Earlier this month, Citi joined JPMorgan, Wells Fargo, and others in planning a shared tokenized deposit network through The Clearing House by mid-2027. That system would convert bank deposits into blockchain tokens while keeping funds inside regulated banking. The private-share product is separate but shares infrastructure goals.

The biggest unknown for traders is whether these depositary receipts will trade on secondary markets. If they do, pricing would reflect the private company’s valuation, meaning quarterly marks, stale net asset values, and wide bid-ask spreads. Tokenization does not fix that. It makes the ledger faster.

Citi plans to expand the offering over time. No timeline for public blockchain support was given.