Citi and SDX partner to tokenize traditional private markets

Investment bank Citi and Switzerland’s SIX Digital Exchange (SDX) are teaming up to modernize traditional private markets through tokenization.

The initiative, revealed during the Point Zero Forum in Switzerland, will leverage SDX’s blockchain-based Central Securities Depositary (CSD) platform to tokenize, settle and safekeep assets, according to a May 6announcement.

The platform, expected to go live by the third quarter of 2025, will make late-stage, pre-initial public offering (IPO) equities accessible to institutional and eligible investors globally.

The project offers issuers a compliant and scalable framework to manage liquidity, particularly for early investors and employees, while maintaining cap table control. For investors, it opens access to high-growth, venture-backed companies in a more efficient and transparent manner.

“We are excited to welcome Citi to the SDX platform and together deliver this landmark project in the tokenization of private shares,” said David Newns, head of SDX.

Newns added that this will “enable the efficient distribution of shares in mature international private companies, which are expected to generate strong investor interest.”

Related:Real-world asset tokenization: Unlocking a new era of finance

Citi to provide servicing for tokenized assets

Citi will provide end-to-end servicing for these tokenized assets as the digital custodian and tokenization agent. “We are meeting client demand for access to emerging and relevant digital asset ecosystems and investments,” added Ryan Marsh, head of innovation and strategic partnerships, investor services and issuer services at Citi.

Marni McManus, Citi’s country officer for Switzerland, said private markets represent a major and growing opportunity, helping digitize an industry still reliant on manual processes and paper-based documentation.

Citi has been among the earliest major financial institutions to express strong confidence in the future of tokenization, even betting that it would become thenext “killer use case” in crypto.

In September 2023, Citigroupintroduced Citi Token Services, a private, permissioned blockchain that offers cross-border payments, liquidity and automated trade finance solutions to institutional clients.

In early 2024, Citigroupteamed up with Ava Labs, other traditional financial institutions and digital asset companies to complete a proof-of-concept for tokenizing private equity funds.

Related:$21B tokenized RWA market doubtful, institutions uninterested — Plume CEO

RWA tokenization gains traction

Citi and SDX’s new initiative comes amid a renewed wave of interest inreal-world asset (RWA) tokenization, with major players from both traditional finance and crypto making headlines last week.

On April 30, BlackRockfiled to create a blockchain-based share classfor its $150 billion Treasury Trust Fund, allowing a digital ledger to mirror investor ownership. On the same day, Libre revealed plans to tokenize $500 million in Telegram debt via its new Telegram Bond Fund.

The most significant news came from Dubai, where MultiBank Groupinked a $3 billion tokenization dealwith UAE real estate firm MAG and blockchain provider Mavryk.

“The recent surge isn’t arbitrary. It’s happening because everything’s lining up,” Eric Piscini,CEO of Hashgraph, told Cointelegraph:

Magazine:Tokenizing music royalties as NFTs could help the next Taylor Swift

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