In a groundbreaking collaboration announced on Tuesday, banking titan Citi has joined forces with SIX Digital Exchange (SDX), the digital assets wing of Switzerland’s primary stock exchange, to tokenize non-publicly traded shares. This innovative venture aims to revamp a cumbersome $75 billion market plagued by outdated PDFs and paper documents.
A Digital Leap in Private Markets
Citi will step into the role of custodian and issuer agent for tokenized versions of late-stage, pre-IPO equities on SDX’s regulated, blockchain-based Central Securities Depository (CSD) platform. The platform, slated to launch in the third quarter of 2025, will initially target Switzerland, Singapore, and other parts of Asia, notably excluding U.S. investors.
The move comes as private shares in high-growth, venture-backed firms increasingly attract attention. With many companies delaying IPOs due to market conditions, secondary markets have become crucial for providing liquidity to investors and employees. However, the current process is marred by inefficiencies. As Nisha Surendran of Citi Ventures explained, “The most notable characteristic of private markets is that there is no infrastructure, at least nothing scalable.”
Investors face a tedious slog through a swamp of PDFs and paper documents, with transaction settlements taking up to eight weeks—a cycle repeated for every exit. This archaic system is ripe for disruption, and Citi’s partnership with SDX seems poised to deliver just that. As explored in our recent coverage of MultiBank, MAG, and Mavryk’s $3B RWA tokenization deal, the trend of tokenizing real-world assets is gaining momentum across the financial sector.
Navigating Regulatory Waters
SDX CEO David Newns highlighted the challenges that have previously stymied blockchain initiatives in private markets. “There’s a very mature digital-securities regulatory environment in Switzerland where we’ve been doing this now since 2021,” he noted. Elsewhere, regulatory hurdles have been formidable, stalling what could have been seamless blockchain solutions for private markets.
SDX’s securities depository, constructed on R3’s Corda distributed ledger technology, offers a streamlined experience for investors. According to Newns, investments “turn up in your bank account in the same way that a normal security does,” eliminating the need for special actions by investors.
This partnership also marks Citi’s entry as a custodian on SDX, a strategic move in its broader plan to open new digital asset markets for clients globally. Nadine Teychenne, Citi’s global head of digital assets, emphasized the collaborative nature of this project, describing it as “a joined-up project across multiple businesses at Citi.”
Broader Implications and Skepticism
While this initiative heralds a new era for private markets, questions linger. Can this nascent tokenization trend sustain its momentum amidst regulatory complexities outside Switzerland? The involvement of digital asset banking group Sygnum and Singapore-based SBI Digital Markets in facilitating access to these pre-IPO equities underscores the global reach and ambition of the project, yet it also highlights potential hurdles. This global ambition mirrors recent moves by other major players, such as Tether’s acquisition of a 70% stake in Adecoagro, which aims to bolster its own tokenization efforts.
As the platform prepares to go live, all eyes will be on its execution and the ripple effects it might have across global markets. Will this partnership set a new standard, or will it face the same stumbling blocks that have tripped up earlier attempts at digitizing private markets?
In a world where blockchain technology inches closer to mainstream finance, the Citi-SDX venture could be a pivotal moment. But like any bold move, it comes with its share of uncertainties—raising questions about what the future holds for tokenized securities and the broader digital asset landscape.
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This article is based on: Citi, Switzerland’s SDX Join Forces to Tokenize $75B Pre-IPO Shares Market
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
