Investment bank Citi has partnered with Swiss Digital Exchange (SDX) to advance the modernization of traditional private markets using tokenization technology.
Project Overview
According to a May 6 announcement at Switzerland's Point Zero Forum, this initiative will utilize SDX's blockchain-based Central Securities Depository (CSD) platform to:
- Tokenize assets
- Facilitate settlement
- Provide custodial services
Key Features
- Launch Timeline: Q3 2025
- Target Investors: Global institutions and qualified investors
- Focus Area: Late-stage, pre-IPO equity investments
Benefits for Stakeholders
For Issuers:
✔ Compliant and scalable liquidity management framework
✔ Maintained cap table control
✔ Improved handling of early investor/employee shares
For Investors:
✔ More efficient investment channel
✔ Greater transparency
✔ Enhanced access to high-growth VC-backed companies
"We're excited to welcome Citi to the SDX platform as we advance this landmark project in private equity tokenization," said David Newns, Head of SDX.
Citi's Role in the Ecosystem
As digital custodian and tokenization agent, Citi will provide end-to-end services for these tokenized assets.
Ryan Marsh, Head of Innovation at Citi, emphasized:
"We're addressing client demand for emerging digital asset ecosystems while creating relevant investment opportunities."
Why This Matters
- Private markets represent a $10+ trillion opportunity
- Current processes remain manual and paper-based
- Tokenization solves critical pain points in illiquid markets
The Growing Tokenization Landscape
This collaboration arrives during significant momentum for real-world asset (RWA) tokenization:
Recent Milestones:
- BlackRock's blockchain-based treasury fund (April 2024)
- Libre's $500M Telegram bond tokenization
- MultiBank Group's $3B Dubai real estate tokenization
👉 Explore how tokenization is transforming finance
FAQ Section
Q: What types of assets will be tokenized initially?
A: The focus will be on late-stage private company equity, particularly pre-IPO shares.
Q: How does this differ from traditional private market investing?
A: Tokenization enables fractional ownership, faster settlement, and automated compliance - overcoming traditional liquidity constraints.
Q: What blockchain technology powers SDX's platform?
A: SDX utilizes a permissioned blockchain specifically designed for regulated financial instruments.
Q: When can investors access this platform?
A: The full launch is scheduled for Q3 2025, with pilot programs potentially starting earlier.
Industry Outlook
Eric Piscini, CEO of Hashgraph, observes:
"Market conditions are now perfect for tokenization - clearer regulations, mature technology, and institutional participation are all aligning."
Notable examples include:
- Franklin Templeton's tokenized money market fund
- Citi's own Token Services for cross-border payments
👉 Learn about institutional adoption of blockchain
Conclusion
This partnership marks a significant step toward financial market modernization, combining Citi's global reach with SDX's blockchain expertise to unlock liquidity in private markets through compliant tokenization solutions.