Citigroup Partners With SDX To Tokenize Pre-IPO Shares

Citigroup has announced a partnership with Swiss firm SDX to tokenize and custody shares of late-stage, pre-IPO companies. This initiative is set to launch in the third quarter of 2025, marking a significant step in the digitization of private markets. The collaboration aims to bring high-growth, venture-backed private companies to institutional investors through SDX’s platform, simplifying liquidity management and ownership tracking for early investors and issuers.

Marni McManus, Citi’s country officer and head of banking for Switzerland, Monaco, and Liechtenstein, highlighted the potential of this venture. "Private markets present a major and growing opportunity," she stated. "Our work with SDX promises to simplify and digitize what is essentially a manual and paper-driven industry today." She further noted that Switzerland's regulatory framework and SDX's infrastructure provide a robust foundation for this innovative solution, addressing longstanding challenges in private markets for both issuers and investors.

The surge in institutional interest in tokenizing real-world assets has been a notable trend over the past two years. This growing popularity is driven by the efficiency and transparency that blockchain technology brings to asset management. By tokenizing shares, Citi and SDX aim to streamline the process, making it more accessible and efficient for all parties involved.

This move by Citi and SDX is part of a broader trend among traditional financial institutions seeking to integrate Web3 technologies into their operations. Last year, Citi conducted a simulation exploring the tokenization of private equity funds using distributed-ledger technology in partnership with a decentralized-finance platform. Similarly, other major financial institutions have engaged in pilot programs to test the feasibility of tokenizing assets, leveraging cross-chain interoperability protocols.

The tokenization of pre-IPO shares represents a strategic shift towards leveraging blockchain technology to enhance the efficiency and accessibility of private markets. By digitizing these assets, Citi and SDX are not only modernizing the industry but also paving the way for future innovations in financial services. This initiative underscores the potential of blockchain technology to revolutionize traditional financial processes, making them more transparent, secure, and efficient.