Citi, SDX Partner to Tokenize Private Markets by 2025

Investment bank Citi and Switzerland’s SIX Digital Exchange (SDX) have announced a partnership to modernize traditional private markets through tokenization. The initiative, unveiled during the Point Zero Forum in Switzerland, aims to leverage SDX’s blockchain-based Central Securities Depositary (CSD) platform to tokenize, settle, and safekeep assets. This platform is expected to go live by the third quarter of 2025, making late-stage, pre-initial public offering (IPO) equities accessible to institutional and eligible investors globally.

For issuers, this project offers a compliant and scalable framework to manage liquidity, particularly for early investors and employees, while maintaining cap table control. For investors, it opens access to high-growth, venture-backed companies in a more efficient and transparent manner. David Newns, head of SDX, expressed excitement about the partnership, stating that it will enable the efficient distribution of shares in mature international private companies, which are expected to generate strong investor interest.

Citi will provide end-to-end servicing for these tokenized assets as the digital custodian and tokenization agent. Ryan Marsh, head of innovation at Citi, highlighted that the partnership meets client demand for access to emerging and relevant digital asset ecosystems and investments. Marni McManus, Citi’s country officer for Switzerland, noted that private markets represent a major and growing opportunity, helping digitize an industry still reliant on manual processes and paper-based documentation.

Citi has been among the earliest major financial institutions to express strong confidence in the future of tokenization, even predicting that it would become the next “killer use case” in crypto. In September 2023, Citigroup introduced Citi Token Services, a private, permissioned blockchain that offers cross-border payments, liquidity, and automated trade finance solutions to institutional clients. In early 2024, Citigroup teamed up with Ava Labs, other traditional financial institutions, and digital asset companies to complete a proof-of-concept for tokenizing private equity funds.

This initiative comes amid a renewed wave of interest in real-world asset (RWA) tokenization, with major players from both traditional finance and crypto making significant strides. On April 30, BlackRock filed to create a blockchain-based share class for its $150 billion Treasury Trust Fund, allowing a digital ledger to mirror investor ownership. On the same day, Libre revealed plans to tokenize $500 million in Telegram debt via its new Telegram Bond Fund. The most significant news came from Dubai, where MultiBank Group inked a $3 billion tokenization deal with UAE real estate firm MAG and blockchain provider Mavryk.

According to Eric Piscini, CEO of Hashgraph, the recent surge in RWA tokenization is not arbitrary. He noted that rules are getting clearer in major markets, the technology is stronger, faster, and ready to scale, and big players are actually implementing these solutions. BlackRock is tokenizing funds, Citi is exploring digital asset custody, and Franklin Templeton has tokenized money market funds on public blockchains. This partnership between Citi and SDX is a significant step forward in the tokenization of traditional private markets, paving the way for more efficient and transparent investment opportunities.