Citigroup Launches Trading of Tokenized Shares of Private Companies

Citigroup, a leading American banking giant, has announced the launch of a groundbreaking blockchain platform designed for trading tokenized shares of private companies. This innovative solution is primarily aimed at affluent and institutional clients, simplifying their access to non-public companies. With the rising interest in pre-IPO investments in firms like SpaceX, Anthropic, and OpenAI, Citigroup’s move signals a significant shift in how investors might engage with private equity markets.

Revolutionizing Private Equity Access Through Blockchain

The new service employs authorized tokenized depository receipts issued by Citigroup itself. Initially, this product will be available exclusively to international investors. However, Citigroup has plans to expand this offering to its U.S.-based clientele as well.
According to Artem Koreniuk, Citi’s Global Head of Digital Assets, this new infrastructure allows investors to manage shares in private companies as conveniently as they would manage public securities. He remarked that “clients can place shares of private companies right alongside their Apple stocks.”

Infrastructure and Potential Broader Adoption

The project’s infrastructure is supported by the Swiss company SIX. Citigroup emphasized that the solution could also be adopted by other banks, potentially paving the way for broader implementation of tokenization on Wall Street.

Tokenization vs. Special Purpose Vehicles (SPVs)

Citigroup believes that tokenized depository receipts could serve as a more transparent alternative to SPVs often used for gaining exposure to shares in private firms. Koreniuk pointed out that “investors do not always know what they are buying,” highlighting how this model offers clarity.
With the boom in products offering access to private company stocks before they go public, several crypto platforms have launched similar solutions recently.

Citi’s Strategic Move Amidst Industry Debates

Following Coinbase’s introduction of perpetual futures on pre-IPO SpaceX shares and their plans for similar offerings with other companies, several platforms have proposed tokenized exposure through SPV mechanisms. However, these have faced criticism from the companies involved.
OpenAI has previously asserted that such tokenized assets do not confer ownership rights over company shares—a stance echoed by Anthropic. Additionally, Robinhood’s launch of tokenized OpenAI shares sparked controversy when OpenAI stated it had not authorized such tools. Despite this, Robinhood CEO Vlad Tenev expressed intentions to continue developing these offerings and integrate them with DeFi protocols.
Amidst these discussions, Citigroup’s launch appears as an attempt to bring tokenization into a more regulated environment within the traditional financial sector.
In conclusion: The first operation under this new infrastructure has already taken place—clients from Citi’s wealth management division invested in Kaleido—a platform for digital asset tokenization.
As various crypto platforms aim at similar products—such as Buidlpad’s “pre-IPO pool” targeting Anthropic’s future stock value through synthetic instruments—Citigroup’s approach may set a precedent for integrating blockchain innovations within conventional finance frameworks while navigating regulatory landscapes effectively.