• Citigroup (C) is set to launch tokenized securities of private companies, using depositary receipts that are tokenized on blockchain infrastructure.
  • The initiative aims to provide liquidity and access to private markets for institutional investors, with a framework that can scale to other banks.
  • This move is part of Citi's broader digital asset push, building on earlier pilots and collaborations with digital exchanges and CSDs.

Citigroup is preparing to introduce tokenized securities representing equity in private companies, according to a bank spokesperson. The new venture will work through depositary receipts that are tokenized, enabling institutional investors to gain exposure to private markets with greater liquidity and efficiency. The infrastructure is designed to pave the way for other banks to participate, signaling a potential industry-wide shift.

“We are creating a framework for tokenizing private securities that can be adopted across the financial system,” a Citi executive said, speaking on condition of anonymity. The bank has been exploring digital asset capabilities for years, including pilot programs for tokenized deposits and cross-border settlement.

The move comes amid growing interest from institutional investors in private credit and equity, which have traditionally been illiquid. By tokenizing depositary receipts, Citi aims to streamline custody, settlement, and transfer, reducing friction for large-scale investors.

Regulatory compliance remains a key focus. The bank is working within existing securities laws, with an eye on evolving digital asset rules in the U.S. and Europe. "We are engaging with regulators to ensure a compliant rollout," the executive added.

Industry observers see this as a significant step toward bridging traditional finance with blockchain. Other banks, including JPMorgan and Goldman Sachs, have similar initiatives, but Citi's focus on private company securities could distinguish it in a competitive landscape.

Attempts to reach the bank for further comment were not successful by press time.

Correction: An earlier version of this article misstated the nature of the tokenized assets. They are depositary receipts, not direct equity. This has been corrected.