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Citi
becomes 1st to launch tokenized depositary receipt service for private shares
By Park Han-sol, The Korea Times - Citi
has become the first to launch a blockchain-based depositary receipt service
for shares in private companies, aiming to make it easier for issuers to reach
investors and for investors to access private market opportunities, the company
said Tuesday.
The launch comes as private companies
remain unlisted for a longer period of time, prompting many to seek alternative
ways to provide liquidity to shareholders without relying on often fragmented
secondary markets.
The new offering, called the Digital
Depositary Receipts, applies Citi’s traditional depositary receipt framework to
private company shares. Using blockchain infrastructure operated by SIX, a
Swiss financial market operator and one of the world’s first fully regulated
digital central securities depositories, the service tokenizes depositary
receipts backed by private market equity.
Under the model, Citi acts as both
issuer and custodian of the digital receipts, handling issuance, settlement and
safekeeping. The company said the structure is designed to simplify transfers
of ownership and broaden investor access while allowing private companies to
remain unlisted and retain existing ownership and voting arrangements.
For private issuers, the product offers
a way to distribute and transfer shares without altering their capital
structure or pursuing a public listing. Investors, meanwhile, gain access to
company equity through a familiar depositary receipt structure rather than
through direct participation in private secondary markets.
“The interoperability of the product
[Digital Depositary Receipts] will further enable Citi to support a wider range
of issuers and investors as digital asset market infrastructure continues to
evolve,” said Biswarup Chatterjee, head of partnerships and innovation for
Citi’s Services business.
The company said the product will be
available to wealth management clients, allowing tokenized depositary receipts
to be offered through existing investment platforms.
Citi is exploring future expansion of
the service across both traditional and digital market infrastructure, as well
as additional blockchain networks.
