Citi Innovation Connects Private Companies and Investors

Citi has announced the launch of Digital Depositary Receipts for private company shares, a new direct and transparent model that expands access to private markets for both issuers and global investors. The launch marks the first time a global financial services firm has acted as both issuer and custodian for tokenised depositary receipts representing private companies. As companies take longer to pursue an Initial Public Offering (IPO), many private firms are seeking alternative routes to access liquidity without relying on fragmented secondary markets. These markets often involve complex structures, multiple intermediaries, and opaque costs. Citi’s latest solution addresses this gap by offering an efficient, cost-effective, and fully digital alternative for a capital market segment traditionally known for its illiquidity. Built on Citi’s industry-leading Digital Depositary and Custody business, the new model uses tokenised depositary receipts to provide a flexible, institutional-grade alternative capable of meeting the scale of private markets. While third-party Special Purpose Vehicles (SPVs) continue to play an important role, Citi’s model can reduce potential complexities and hidden costs by having Citi act as the sole issuer and trusted custodian. The Digital Depositary Receipts apply Citi’s depositary receipt product to private market shares, utilising blockchain infrastructure operated by SIX, one of the world’s first fully regulated digital financial market infrastructures. Citi serves as the custodian bank on the platform, responsible for transaction settlement and safekeeping of the tokenised depositary receipts. The new service officially launched with an inaugural transaction between Kaleido, a tokenisation and digital asset platform and Citi portfolio company, and investors from Citi’s Wealth business, supported by the Secondary Private Markets team. The successful launch was a coordinated One Citi effort, bringing together Issuer Services, Custody, Wealth, Markets, and Ventures to enhance the client experience while building a scalable model for future issuances. Biswarup Chatterjee, Head of Partnerships and Innovation for Citi Services, stated that as private markets continue to evolve, the need for diverse and trusted access points is growing. He noted that the Digital Depositary Receipts are designed to deliver superior client service, safeguard assets, and facilitate capital markets activity with the same rigour that underpins traditional financial markets. The innovation ensures issuers receive distribution and transfer proceeds efficiently without requiring a public listing or altering underlying ownership rights. Companies retain control over voting rights and maintain a simpler capitalisation table structure while broadening their reach to a wider investor base. For Wealth clients, the product expands access to offerings through a familiar investment structure. By integrating tokenised depositary receipts into Citi’s Wealth platform, the bank ensures clients have more investment choices while maintaining the operational safeguards and experience investors expect. Deborah Querub, Head of Digital Assets for Wealth, said the priority is ensuring clients can engage with the evolution of digital assets in a safe and familiar manner. She added that the transaction represents a step-by-step approach to leveraging digital capabilities to broaden investment options for Wealth clients. Following the inaugural issuance with Kaleido, Founder and CEO Steve Cerveny said private companies like his grow faster than other types of firms. He noted that the model finally brings a level of professionalism and transparency to private market capital raising that was previously inaccessible, allowing private companies to explore new growth paths while retaining their agility. Citi is currently exploring further development of the service to operate across various financial market infrastructures, both digital and traditional, as well as across multiple blockchain networks.