Citigroup Launches Tokenized Shares of Private Companies for Wealthy Clients
Citigroup is setting up a blockchain platform for tokenized shares of private companies. The bank says it wants to make private equity easier for wealthy clients to access.
Key Takeaways
- Citigroup is launching a blockchain platform for wealthy and institutional clients to trade tokenized shares of private companies.
- The bank wants to make private equity easier to access, a market that has traditionally been hard to get into.
- Citigroup is joining a broader Wall Street trend, with Republic and Robinhood also experimenting with tokenized private shares.
Citigroup is launching a new blockchain platform that lets wealthy and institutional clients trade tokenized shares of private companies. The move is meant to make private equity easier to access, a market that has traditionally been hard to get into and where demand for institutional participation is growing.
Access to Private Equity Through Blockchain
The launch of tokenized shares taps into the trend of companies staying private longer before going public. Big names like SpaceX and Anthropic are widely expected to eventually hit the public markets, but the longer private phase is creating demand for other ways to invest in private companies. Citigroup is initially focusing on foreign investors and is in talks with some of the biggest private companies about joining the initiative.
Citigroup's Push Into Tokenization
This move fits into Citigroup's multi-year strategy to promote tokenization. In 2023, the bank predicted that the market for tokenized securities could grow to $4 trillion by 2030. Citigroup previously rolled out a pilot that turned customer deposits into digital tokens on a private blockchain, making fast cross-border payments possible. The bank is also working with a consortium led by JPMorgan on a tokenized deposit network that is expected to go live around 2027, with the goal of enabling 24/7 settlement for large clients worldwide.
A Broader Wall Street Move
Citigroup is not the only one taking this approach. Other players like Republic and Robinhood are also experimenting with tokenized shares of private companies, including SpaceX and OpenAI. While some companies, like OpenAI, have spoken out against unauthorized tokens, interest in tokenization is growing as a way to make private equity more accessible and transparent. Analysts are calling it an "equity tokenization wave" that could significantly change how private shares are traded.
Why This Matters for European Investors
For European investors, this development could point to wider access to private equity through blockchain-based platforms, which may open up new investment opportunities. The growing adoption of tokenization by major financial institutions like Citigroup could also affect European market structure and the rules around digital securities.
