• Citigroup is reportedly planning to enable wealthy and institutional clients to trade tokenized shares of private firms on a blockchain. 
• The venture will operate using tokenized depositary receipts with Citi as the issuer and custodian. 
• Citi is in talks with top private firms to adopt the infrastructure as companies delay their IPO.

Citigroup is preparing to launch a blockchain-based platform that will allow wealthy and institutional investors to trade tokenized shares of private companies, according to a Thursday report by The Wall Street Journal.

The platform will use tokenized depositary receipts, with Citi acting as both issuer and custodian. The bank is reportedly in discussions with several large private companies about participating in the initiative as firms continue to postpone initial public offerings (IPOs).

Citi locks eyes on tokenized private shares amid growing institutional involvement

The move reflects growing interest among financial institutions in tokenization and bringing traditionally illiquid markets onto blockchain infrastructure.

Under the proposed structure, investors would gain exposure to private company shares through blockchain-based instruments rather than holding the underlying equity directly.

The platform is expected to initially target non-US investors, though the scope could expand depending on regulatory developments and market demand.

The initiative comes as many private companies continue to delay IPO plans. The delays have also been accompanied by increasing competition from crypto-native firms seeking to offer exposure to private markets.

Crypto platforms have recently begun introducing products tied to the valuations of high-profile private companies. Decentralized exchange Hyperliquid (HYPE) offers perpetual contracts linked to SpaceX valuations, allowing traders to speculate on the company's market value before its public listing.

Meanwhile, Coinbase has launched pre-IPO perpetual futures contracts beginning with SpaceX. The products are settled in USDC and provide traders with synthetic exposure to private companies before they enter public markets.

The emergence of these products has highlighted growing investor demand for access to private markets. However, unlike crypto-native offerings that often provide synthetic exposure, Citi's proposed platform would operate within a traditional financial framework centered on regulated custody and issuance structures.

The bank is reportedly seeking broader industry participation in the infrastructure, potentially allowing tokenized private-company shares to be held alongside traditional securities within investment portfolios.

The move adds to a broader trend of traditional financial institutions embracing tokenization. Earlier this month, Citi joined a consortium of major US banks planning a shared tokenized deposit network through The Clearing House by 2027.