Introduction to Tokenization
Investment bank Citi and Switzerland’s SIX Digital Exchange (SDX) have partnered to modernize traditional private markets through tokenization. This initiative was announced during the Point Zero Forum in Switzerland and will utilize SDX’s blockchain-based Central Securities Depositary (CSD) platform to tokenize, settle, and safekeep assets.
How the Partnership Works
The platform, which is expected to launch by the third quarter of 2025, will make late-stage, pre-initial public offering (IPO) equities accessible to institutional and eligible investors globally. For issuers, the 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.
Benefits of the Partnership
According to David Newns, head of SDX, this partnership 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, added that the bank is meeting client demand for access to emerging and relevant digital asset ecosystems and investments.
Citi’s Involvement in Tokenization
Citi has been among the earliest major financial institutions to express strong confidence in the future of tokenization. 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.
Growing Interest in RWA Tokenization
The partnership between Citi and SDX comes amid a renewed wave of interest in real-world asset (RWA) tokenization. Major players from both traditional finance and crypto have made headlines in recent weeks. For example, BlackRock filed to create a blockchain-based share class for its $150 billion Treasury Trust Fund, while Libre revealed plans to tokenize $500 million in Telegram debt via its new Telegram Bond Fund.
Expert Insights
According to Eric Piscini, CEO of Hashgraph, the recent surge in interest in RWA tokenization is not arbitrary. "Rules are getting clearer in major markets. The tech is stronger, faster, and ready to scale. And big players are actually doing it — BlackRock is tokenizing funds, Citi is exploring digital asset custody, and Franklin Templeton has tokenized money market funds on public blockchains."
Conclusion
In conclusion, the partnership between Citi and SDX marks a significant step forward in the modernization of traditional private markets through tokenization. With the expected launch of the platform in 2025, institutional and eligible investors will have access to late-stage, pre-IPO equities, and issuers will have a compliant and scalable framework to manage liquidity. As the interest in RWA tokenization continues to grow, it will be exciting to see how this technology evolves and transforms the financial industry.
