Key Takeaways
- • Citi and SDX launched a collaboration to tokenize late-stage pre-IPO equities on SDX's regulated blockchain-based Central Securities Depositary (CSD) platform, with expected live deployment by Q3 2025.
- • The solution addresses fragmentation in traditional private markets by enabling institutional and eligible investors direct access to shares in mature venture-backed companies while providing issuers with simplified liquidity management and cap table control.
- • Citi completed a proof of concept on tokenizing private funds with Wellington Management and WisdomTree, validating the technical and operational feasibility of the approach.
- • The initiative positions Citi to capture a significant portion of private markets activity through regulated digital infrastructure, leveraging Switzerland's regulatory framework and SDX's technology stack for compliance and settlement.
- • This marks a strategic pivot for Citi into tokenized private markets infrastructure, combining its securities services expertise with blockchain-native settlement and custody capabilities.
Summary
Citi and SDX announced a partnership to bring tokenized private market assets to institutional investors, addressing long-standing inefficiencies in the traditionally manual and paper-driven private equity and pre-IPO markets. The collaboration, announced at the Point Zero Forum in Zurich, will enable Citi to tokenize, settle, and safekeep late-stage pre-IPO equities on SDX's regulated blockchain-based Central Securities Depositary platform. The solution is expected to launch by the third quarter of 2025.
The partnership leverages complementary strengths: Citi contributes deep expertise in securities services and private market investments, while SDX provides regulated digital infrastructure specifically designed for tokenized securities. For institutional and eligible investors, the offering dramatically improves accessibility to shares in mature, high-growth venture-backed companies—historically concentrated among early investors, company employees, and a limited set of institutional players. For private company issuers, the tokenized structure simplifies liquidity management for early investors and employees while maintaining robust cap table control, addressing a critical pain point in private markets operations.
Citi has already advanced this capability beyond theoretical framework, completing a proof of concept with Wellington Management and WisdomTree on tokenizing private funds. This validation demonstrates the technical viability and operational readiness of the broader tokenization initiative. SDX Head David Newns emphasized that the initiative "will distinguish itself in the industry by using SDX's regulated blockchain based technology to enable the efficient distribution of shares in mature international private companies, which are expected to generate strong investor interest." Marni McManus, Citi's Country Officer and Head of Banking for Switzerland, Monaco & Liechtenstein, noted that Switzerland's regulatory framework enables Citi "to bring a new solution to market using technology to solve for challenges in private markets for issuers and investors."
The timing reflects accelerating institutional adoption of tokenized securities infrastructure and growing demand from sophisticated investors to access private market returns without traditional friction. By anchoring tokenization to a regulated CSD—the institutional backbone for securities settlement—rather than unregulated blockchain networks, Citi and SDX position themselves within compliance frameworks familiar to global regulators and institutional asset managers, reducing adoption barriers compared to alternative approaches.
The partnership leverages complementary strengths: Citi contributes deep expertise in securities services and private market investments, while SDX provides regulated digital infrastructure specifically designed for tokenized securities. For institutional and eligible investors, the offering dramatically improves accessibility to shares in mature, high-growth venture-backed companies—historically concentrated among early investors, company employees, and a limited set of institutional players. For private company issuers, the tokenized structure simplifies liquidity management for early investors and employees while maintaining robust cap table control, addressing a critical pain point in private markets operations.
Citi has already advanced this capability beyond theoretical framework, completing a proof of concept with Wellington Management and WisdomTree on tokenizing private funds. This validation demonstrates the technical viability and operational readiness of the broader tokenization initiative. SDX Head David Newns emphasized that the initiative "will distinguish itself in the industry by using SDX's regulated blockchain based technology to enable the efficient distribution of shares in mature international private companies, which are expected to generate strong investor interest." Marni McManus, Citi's Country Officer and Head of Banking for Switzerland, Monaco & Liechtenstein, noted that Switzerland's regulatory framework enables Citi "to bring a new solution to market using technology to solve for challenges in private markets for issuers and investors."
The timing reflects accelerating institutional adoption of tokenized securities infrastructure and growing demand from sophisticated investors to access private market returns without traditional friction. By anchoring tokenization to a regulated CSD—the institutional backbone for securities settlement—rather than unregulated blockchain networks, Citi and SDX position themselves within compliance frameworks familiar to global regulators and institutional asset managers, reducing adoption barriers compared to alternative approaches.
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