Citi has embarked on a pioneering venture that allows investors to combine private company shares with their public stock holdings through tokenized depositary receipts. This approach leverages blockchain technology to simplify the investment process and enhance transparency for clients seeking to diversify their portfolios.
The initiative, reported by The Wall Street Journal, enables clients to manage private equity alongside well-known public stocks like Apple. Artem Korenyuk, Citi’s global lead for digital assets, highlighted the importance of this model, stating, "This lets clients put private-company shares essentially right next to their Apple stock." This shift could redefine how investors approach equity investments by providing a clearer and more integrated framework.
Tokenized depositary receipts represent a significant improvement over traditional investment structures, such as special-purpose vehicles (SPVs), which have often faced criticism for their lack of transparency and regulatory scrutiny. Korenyuk noted that many investors are unaware of what they are truly purchasing when using SPVs. The new receipts aim to address these concerns by offering a straightforward alternative that enhances clarity in private equity investments.
Citi's blockchain solution is currently operational on the SIX platform in Switzerland, with plans for expansion to other networks. While initially aimed at foreign investors, the service will eventually be available to U.S. clients as well. This step marks a critical evolution in the financial sector, allowing broader access to private investments without the cumbersome barriers typically associated with SPVs.
The first trade under this new system involved wealth clients investing in Kaleido, an institutional tokenization platform, setting a precedent for future transactions. This infrastructure not only benefits Citi’s clientele but also has the potential for adoption by other banks, extending its impact across the industry.
Citi's stock performance reflects broader investor confidence in its innovative strategies. The bank's shares have risen by more than 1% recently, more than doubling from lows of $57 in early 2025. With key earnings reports on the horizon, analysts anticipate a positive outlook, projecting earnings per share to reach $2.60, up from $1.96 the previous year. As the market watches for a possible break above $137, which would propel the stock toward $140 to $145, investor sentiment remains optimistic.
As financial institutions explore the intersection of traditional equity and digital assets, Citi’s initiative could serve as a blueprint for integrating private investments into mainstream portfolios. By enhancing access and clarity, the bank positions itself as a leader in financial innovation and sets a new standard for investor engagement in the evolving equity markets.
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