Citi just cut the SPV out of private equity investing by turning depositary receipts into blockchain tokens.
On Thursday, Citigroup unveiled its Digital Depositary Receipts (DDRs), a product that lets wealthy and institutional investors buy exposure to private company shares through a bank-issued security recorded on blockchain infrastructure run by Swiss market operator SIX. Citi acts as both issuer and custodian — you own the DDR, not the underlying shares, but you get the economic exposure without a cascade of special-purpose vehicles and intermediaries.
Why the Private Market Needs a New Plumbing Layer
Private companies are staying private longer, and demand for their equity has surged. Until now, getting in meant chasing SPVs, side letters, and messy secondary markets. Citi's DDR adapts the classic depositary receipt structure — the same mechanism that lets you buy Alibaba shares on the NYSE without dealing with Hong Kong clearing — for private firms. The first deal involved Kaleido, a digital asset and tokenization company backed by Citi Ventures and investors in Citi's wealth management business.
The bank argued this approach is simpler and more transparent than existing structures. No SPV patchwork, no multiple intermediaries. One bank-issued token representing a piece of a private company, custodied by the same bank.
Tokenized Deposits Are the Next Act
Citi's move isn't an island. The DDR launch is part of a larger institutional push to tokenize traditional assets — stocks, bonds, deposits — into digital tokens that can move across blockchain networks. Earlier this month, Citi joined the largest U.S. banks in announcing plans to build a shared tokenized deposit network through The Clearing House, with a target launch by mid-2027. That system would convert bank deposits into blockchain-based tokens while keeping funds inside regulated banking rails.
For now, DDRs live on SIX's private infrastructure. Citi says it will expand the offering over time and eventually support public blockchain networks, which would open the door to a wider range of participants and interoperability with emerging tokenized money networks.
Citi's DDR pulls private equity out of bespoke legal structures and into programmable, bank-grade tokens. When those tokens can settle against tokenized deposits on a shared ledger, private markets will look a lot more like public ones — open 24/7, lower cost, and auditable on-chain.
Source: Citi opens new route into private markets with tokenized share offering
Domain: coindesk.com
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