Citi has launched Digital Depositary Receipts for private shares. The product creates a new avenue for global issuers and investors to access private markets without requiring a public listing.

The structure represents a first-of-its-kind model for Citi that combines both issuance and custody functions.

While it aims to streamline access, the process still relies on regulated intermediaries and infrastructure layers to function correctly.

Private companies are seeking alternative liquidity routes as initial public offering timelines stretch. Traditional secondary markets often involve complex structures, multiple intermediaries, and less transparent fees.

Executing tokenisation through SIX

The solution applies the depositary receipt product of Citi to private market shares using blockchain infrastructure operated by SIX.

SIX is a fully regulated digital central securities depository based in Switzerland.

Citi serves as the custodian on the platform and handles the settlement and safekeeping of the receipts.

These tokenised instruments represent economic exposure and contractual claims rather than direct equity ownership of the private company shares.

The underlying shares remain unchanged, but the rights are represented through a layered legal wrapper known as a depositary receipt structure. This allows companies to maintain control over voting and cap table management.

Inaugural transaction with Kaleido

The product went live through an inaugural transaction involving Kaleido and investors within the wealth management division at Citi.

Kaleido is an institutional tokenisation platform and a portfolio company of the bank.

“As private markets continue to grow, so has the need for diverse and trusted access points. 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.”

Bis Chatterjee, Head of Partnerships and Innovation, Services, said.

Integrating tokenised depositary receipts into existing wealth platforms expands access to private market offerings through a familiar investment structure.

Citi is considering future extensions of the offering across both digital and traditional financial market infrastructures, as well as multiple blockchain networks.

Featured image credit: Edited by Fintech News Switzerland, based on image by lifeforstock via Magnific