Citi launches tokenised depositary receipts for private firms

Citi has launched tokenised depositary receipts that represent economic stakes in private companies as digital tokens recorded on a ledger. The bank is offering the product through its securities services operations.

Under the structure, a depositary entity holds legal title to the underlying private-company shares while the token represents beneficial exposure. Tokens are recorded on a digital ledger to enable faster transfers, fractional ownership and clearer provenance of holdings.

The offering targets private companies seeking additional sources of capital and liquidity and institutional and professional investors, including asset managers, family offices and wealth managers, seeking access to private-market opportunities. The bank describes a controlled issuance and redemption process that includes investor onboarding, compliance screening and restrictions on where tokens may be transferred.

Receipts can be structured to preserve shareholder rights and contractual terms while allowing tokens to move on authorised trading venues or platforms. The bank says the structure can reduce administrative steps such as manual updates to shareholder registers and enable quicker settlement cycles when transfers occur on authorised ledgers.

Citi notes regulatory and operational controls are central to deployment, including investor verification, compliance checks and limits on transferees. Market infrastructure such as approved trading venues, clear legal documentation and accepted custody arrangements will affect how widely tokenised receipts are used.

Other banks and fintech firms are developing similar tokenisation tools for equities, funds and private assets as demand grows for secondary trading and fractionalised products in private markets.