Citi Debuts Tokenized Depositary Receipts for Private Shares

§ 01 Executive Snapshot

What: Citi launches Digital Depositary Receipts for private shares.
Who: Citi, SIX, Kaleido, investors in Citi’s Wealth business.
Why it matters: This initiative provides a transparent and efficient model for accessing private markets, addressing liquidity challenges for private companies.

Citi is the first global financial services company to issue and act as custodian for tokenized depositary receipts representing private companies.
The Digital Depositary Receipts model aims to simplify access to private markets, reducing complexity and hidden costs associated with traditional structures.
The inaugural transaction involved Kaleido and investors from Citi’s Wealth business, marking the successful launch of the new solution.

The launch reflects a growing trend among private companies seeking alternative liquidity options amid extended IPO timelines and fragmented secondary markets.
By leveraging blockchain infrastructure, Citi positions itself as a leader in the evolving landscape of private equity and digital assets.

This model could reshape how private companies access capital, potentially increasing the attractiveness of private market investments for institutional investors.
Citi’s integration of digital assets into its service offerings may enhance its competitive edge in the financial services industry.

Potential regulatory challenges related to the issuance of tokenized securities and the operation of digital custodians.
Competition from other financial institutions and fintech platforms that may develop similar tokenization solutions.

Future transactions and collaborations that expand the reach of Digital Depositary Receipts into other sectors or markets.
Regulatory developments that could impact the operational framework for tokenized securities and custodial services.

§ 07

What are Digital Depositary Receipts?

Digital Depositary Receipts are tokenized representations of private shares that simplify access to private markets.

Why is Citi launching this initiative?

Citi aims to provide a transparent and efficient model for accessing private markets, addressing liquidity challenges for private companies.

How does the Digital Depositary Receipts model benefit investors?

The model reduces complexity and hidden costs associated with traditional structures, making private market investments more attractive.