Citi, Swiss Firm SDX to Unveil Tokenization for Pre-IPO Shares Market in Q3

Citigroup will join with Switzerland’s Six Digital Exchange to offer tokenized shares in pre-IPO companies, with a start date in this year’s third quarter, the multi-national banking firms said Tuesday in a press release.  

Citi will tokenize and custody companies’ shares on the exchange, bringing “high-growth, venture-backed private companies” to institutional investors on SDX’s platform, according to their joint statement. The tokenization of those assets will simplify liquidity management for early investors and issuers, in addition to simplifying the process of tracking ownership of company shares, according to Citi. 

“Private markets is a major and growing opportunity and our work with SDX promises to simplify and digitize what is essentially a manual and paper-driven industry today,” said Marni McManus, Citi’s country officer and head of banking for Switzerland, Monaco, and Liechtenstein. 

“Switzerland’s regulatory framework and SDX’s infrastructure allows Citi to bring a new solution to market using technology to solve for challenges in private markets for issuers and investors,” she added.

The popularity of tokenizing real-world assets on blockchains has skyrocketed over the past two years. The total market capitalization of real-world assets on chain is $22.1 billion as of writing time, a 245% increase from the roughly $6.4 billion of RWAs on blockchains in May 2023, according to RWA data provider rwa.xyz. Meanwhile, BlackRock’s tokenized-asset fund BUIDL,  which debuted in March 2024, has reached a $2.8 billion market capitalization as of May 5, DeFiLlama data shows. 

Overall, RWAs are expected to hit some $50 billion in value by the end of this year, according to at least one industry projection. 

As RWA tokenization gains traction, traditional financial powerhouses have increasingly sought to push into the Web3 world. 

Last year, Citi executed a simulation that explored how private equity funds can be tokenized by leveraging distributed-ledger technology, in partnership with decentralized-finance platform AVAX. Similarly, JP Morgan and BNY Mellon revealed last year that they had conducted a tokenization pilot program, leveraging Chainlink’s cross-chain interoperability protocol.  

Edited by James Rubin