Global financial services institution Citi has introduced Digital Depositary Receipts on private shares to improve access to private markets for international issuers and investors. The product marks the first instance of a global financial company simultaneously issuing and acting as a custodian for tokenised depositary receipts representing private firms.
The new model intends to provide an alternative route to liquidity for private companies experiencing extended initial public offering timelines. It addresses fragmented secondary markets which often feature complex structures and less visible fee frameworks. By acting as a single issuer and custodian, the financial group aims to provide a cost-effective alternative to traditional third-party Special Purpose Vehicles.
The system applies the existing depositary receipt product line of Citi Issuer Services to private market equities. The asset tracking uses blockchain infrastructure provided by SIX, which operates as a regulated digital central securities depository. Within this framework, Citi serves as the custodian responsible for the settlement and safekeeping of the tokenised instruments.
The initial live transaction was completed between institutional tokenisation platform Kaleido, which is a portfolio company of the bank, and investors within the wealth management business. The transaction involved internal coordination across Issuer Services, Custody, Wealth, Markets and Ventures teams.
The system allows private companies to transfer and distribute shares efficiently without public listings or altering underlying corporate ownership rights. Issuers maintain voting controls and cap table management structures while reaching a wider investor base. Wealth clients can use the product through a familiar investment framework integrated into existing platform systems.
Steve Cerveny, Founder and CEO of Kaleido, said: “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.”
The institution is evaluating potential extensions of the product line to function across varied digital and traditional financial market infrastructures alongside multiple blockchain networks.
