Investment banking giant Citi has partnered with SIX Digital Exchange (SDX) in Switzerland to modernize traditional private markets via tokenization. This groundbreaking initiative, which was unveiled during the recent Point Zero Forum in Switzerland, aims to leverage SDX’s blockchain-based Central Securities Depositary (CSD) platform for the tokenization, settlement, and safekeeping of various assets.
The collaboration is expected to enable access to late-stage, pre-initial public offering (IPO) equities for institutional and eligible investors worldwide, enhancing market efficiency and transparency. Anticipated to go live by the third quarter of 2025, this project will provide a much-needed framework for issuing companies to manage liquidity, particularly for early investors and employees, while retaining control over their capitalization tables.
David Newns, head of SDX, expressed excitement about the partnership, emphasizing that this initiative will facilitate the efficient distribution of shares among mature international private companies, which are likely to attract significant investor interest.
In terms of operational support, Citi will function as the digital custodian and tokenization agent for these tokenized assets. Ryan Marsh, Citi’s head of innovation, stated, “We are meeting client demand for access to emerging and relevant digital asset ecosystems and investments.” Marni McManus, Citi’s country officer for Switzerland, highlighted the significant growth opportunity within private markets, which remain heavily reliant on traditional manual processes and paper-based documentation.
Historically, Citi has demonstrated strong confidence in the potential of tokenization, positing it as the next major use case in the realm of cryptocurrencies. Recent developments include the launch of Citi Token Services, a private, permissioned blockchain designed to provide cross-border payments and liquidity solutions for institutional clients.
Moreover, as part of its ongoing efforts, Citi recently collaborated with Ava Labs and other notable financial institutions to explore the tokenization of private equity funds, signaling its commitment to advancing digital asset integration.
Real-World Asset Tokenization: A Growing Trend
The partnership between Citi and SDX emerges against a backdrop of increasing interest in real-world asset (RWA) tokenization. Major players from both traditional finance and the cryptocurrency sector have begun making concerted moves in this space. For instance, BlackRock recently filed to create a blockchain-based share class for its $150 billion Treasury Trust Fund, allowing for a digital representation of investor ownership.
Similarly, developments in Dubai showcased a significant $3 billion tokenization deal between MultiBank Group and UAE real estate firm MAG, highlighting the expanding scope of tokenization initiatives.
As Eric Piscini, CEO of Hashgraph insightfully stated, this uptick in tokenization is no coincidence. “Rules are getting clearer in major markets. The tech is stronger, faster, and ready to scale. Major players are actively participating—BlackRock is tokenizing funds, Citi is exploring digital asset custody, and Franklin Templeton has already tokenized money market funds on public blockchains.” Such dynamics indicate a notable shift within the financial landscape as tokenization gains traction and recognition as a viable framework for investment.
