Citi's Tokenized Receipts Let Wealth Clients Own Private Shares

Citi launched a tokenized depositary receipt that lets its wealth clients buy shares in private companies through a regulated blockchain structure. The Digital Depositary Receipts sit on SIX's digital central securities depositary, with Citi acting as custodian for settlement and safekeeping.

Kaleido, an institutional tokenization platform and a Citi portfolio company, was the first issuer. Investors within Citi's Wealth business bought the receipts. Kaleido CEO Steve Cerveny said private companies are scaling faster than the capital-formation structures available to them. "Citi's Digital Depositary Receipts allow us to explore new paths for growth while keeping the agility that makes private companies competitive," he said in a statement.

Citi's Bis Chatterjee, head of partnerships and innovation for services, said the product meets demand for diverse and trusted access points to private markets as those markets grow. "Our Digital Depositary Receipts product is designed to provide superior client service, safeguard assets and facilitate capital markets activity with the same rigor that underpins traditional financial markets," Chatterjee said. Deborah Querub, head of digital assets for Wealth at Citi, said the bank is focused on "responsibly expanding access to new types of investment opportunities while preserving the structures, protections and experience our clients expect."

The product tackles a structural friction. Private companies stay private longer than they used to. The investor base for pre-IPO shares is narrow. Secondary sales are slow and manual. A depositary receipt wrapper – even tokenized – keeps the legal and custody protections institutional investors require. The blockchain layer speeds settlement and could broaden the pool of eligible buyers.