Citi has launched digital depositary receipts for private shares, introducing a direct and transparent model that broadens access to private markets for both global issuers and investors.

The launch marks the first time a global financial services company is both issuing and acting as a custodian for tokenized depositary receipts representing private companies.

As timelines for initial public offerings ( IPOs ) stretch, private companies are seeking alternative routes to access liquidity rather than navigating fragmented secondary markets.

These markets often require navigating structures that can, in some cases, be difficult to understand and involve multiple intermediaries and less transparent fees. Citi’s new solution addresses this gap by delivering an efficient, cost-effective and digitally native solution for a historically illiquid segment of capital markets

Reducing complexity

Building on its industry-leading depositary receipts and custody businesses, Citi’s model uses tokenized depositary receipts to provide a flexible, institutional-grade alternative capable of meeting the scale needed for private markets.

While other structures like third-party special purpose vehicles ( SPVs ) serve a valuable market function, Citi’s model can reduce the potential for complexity and hidden costs, given that the bank acts as a single, trusted issuer and custodian.

Citi’s digital depositary receipts for private market shares use blockchain infrastructure operated by SIX, one of the world’s first fully regulated digital central securities depositories, to tokenize the shares. As part of its collaboration with SIX, Citi serves as a custodian on the platform, responsible for the settlement and safekeeping of the tokenized depositary receipts.

This new solution went live with an inaugural transaction between Kaleido, an institutional tokenization and digital asset platform and a Citi portfolio company, and investors within the bank’s wealth business.

Interoperable model

“Our digital depositary receipts product is designed to provide superior client service, safeguard assets, and facilitate capital markets activity with the same rigour that underpins traditional financial markets,” says Biswarup Chatterjee, head of partnerships and innovation for Citi’s services business. “The interoperability of the product will further enable Citi to support a wider range of issuers and investors as digital asset market infrastructure continues to evolve.”

The innovation is designed to ensure issuers receive efficient distribution and transfer without the need for public listing or altering underlying ownership rights, according to the bank.

For wealth clients, the product expands access to offerings through a familiar investment structure. By integrating tokenized depositary receipts into existing wealth platforms, Citi aims to enhance client optionality while maintaining the operational safeguards and client experience investors expect.

Kaleido founder and chief executive officer Steve Cerveny adds: “Private companies like ours are scaling faster than the structures around us. This model finally brings a level of professionalism and transparency to private market capital formation that we’ve never had access to. Citi’s digital depositary receipts allow us to explore new paths for growth while keeping the agility that makes private companies competitive, and that’s an advantage for founders planning long-term.”