Citi Unveils Blockchain-Based Digital Depositary Receipts for Private Markets
Citigroup launched Digital Depositary Receipts, enabling wealthy and institutional investors to access private company shares via blockchain. The product debuts on SIX infrastructure, with plans to expand to public blockchains. This move underscores banking’s push to tokenize traditional assets and modernize investment access.
Quick Take
Citi's new Digital Depositary Receipts tokenize private company shares for wealth clients.
Product runs on SIX blockchain, with expansion to public chains planned.
Bank acts as issuer and custodian, simplifying private-market investing.
Part of broader tokenization trend; Citi also joins interbank deposit network.
Market Impact Analysis
BullishMajor bank tokenizing private shares demonstrates institutional adoption of blockchain, encouraging further integration of traditional finance and crypto.
Speculation Analysis
Key Takeaways
- Citi’s Digital Depositary Receipts tokenize private company shares, giving wealth clients blockchain-based exposure.
- Product operates on SIX’s infrastructure, with Citi as issuer and custodian, and plans to expand to public blockchains.
- Launch responds to surging demand for private-market investments as companies stay private longer.
- Part of broader banking tokenization push; Citi also joined a shared deposit network via The Clearing House targeting mid-2027.
What Happened
Citigroup launched Digital Depositary Receipts, a blockchain-based security enabling wealthy and institutional investors to gain exposure to private company shares. The product tokenizes equity, with Citi acting as issuer and custodian. The first transaction involved Kaleido, a tokenization firm backed by Citi Ventures. The securities are recorded on infrastructure run by Swiss exchange operator SIX. The move brings a traditional depositary receipt structure onto a digital ledger, aiming to simplify private-market investing. This launch is part of Citi’s broader strategy to bring traditional assets onto blockchain rails.
The Numbers
The initial transaction partnered with Kaleido, a Citi Ventures portfolio company. The underlying blockchain is provided by SIX, a regulated financial market infrastructure. Citi plans to eventually support public blockchain networks, potentially broadening participation. Additionally, Citi joined major U.S. banks to develop a shared tokenized deposit network through The Clearing House, targeting mid-2027. This product does not involve direct share ownership; investors hold depositary receipts.
Why It Happened
Demand for private-market investments has surged as high-growth companies delay IPOs. Traditional access routes often involve complex special-purpose vehicles. By tokenizing depositary receipts on blockchain, Citi offers a more transparent and efficient alternative. The launch also aligns with the banking industry’s broader tokenization trend, which promises faster settlements and lower costs. Citi’s involvement in tokenized deposits indicates a strategic commitment to digital asset infrastructure.
Broader Impact
This product could accelerate institutional adoption of tokenized securities, bridging traditional finance and blockchain. If successful, it may encourage other major banks to tokenize private assets. Expansion to public blockchains would further integrate crypto networks with regulated markets. The move also reinforces blockchain’s role in modernizing financial infrastructure, potentially influencing regulatory frameworks.
What to Watch Next
- Monitor whether Citi expands to public blockchains and which networks are adopted (e.g., Ethereum, Avalanche).
- Watch for competing offerings from other major banks tokenizing private shares or other assets.
- Track the progress of the interbank tokenized deposit network by mid-2027, which could complement this product.
This article is for informational purposes only and does not constitute financial advice.
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