Citi Opens the Door to Private Company Shares Before IPOs — Here’s What Investors Need to Know

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• Citi is building a blockchain marketplace to provide access to private company shares before IPOs.
  
• Tokenization could improve transparency in private investing but regulatory challenges remain.
  
• Growing demand for pre-IPO opportunities is pushing Wall Street toward digital asset solutions.

Citigroup is taking a major step into the future of digital finance by developing a blockchain-based marketplace designed to give investors access to shares of private companies before they go public. The move highlights Wall Street’s growing interest in tokenization, a technology that could reshape how investors buy, sell, and manage ownership in private markets.

The banking giant plans to use tokenized depositary receipts that represent ownership interests in private firms. The platform aims to create a new path for institutional and international investors seeking exposure to high-growth companies before their public listings.

Citi’s Tokenized Share Platform Targets Pre-IPO Opportunities

According to reports, Citi’s new marketplace will initially focus on investors outside the United States, with plans to expand access to US investors later. The bank says the system could allow investors to hold exposure to private companies alongside traditional assets such as publicly traded stocks.

The project is expected to rely on blockchain infrastructure operated by SIX Digital Exchange, a subsidiary of SIX Group. Citi is also reportedly in talks with several private companies that may eventually make their shares available through the platform.

Tokenization Could Change How Investors Access Private Markets

Citi’s move reflects a wider trend among financial institutions exploring blockchain technology beyond cryptocurrencies. Banks and asset managers are increasingly testing tokenized assets as a way to improve transparency, efficiency, and accessibility in traditional markets.

The approach is also positioned as an alternative to special-purpose vehicles (SPVs), which have often been used to give investors indirect access to private companies. Tokenized depositary receipts could provide a clearer ownership structure, though questions around regulation, liquidity, and investor protections remain.

The rise of private market investing has increased demand for these solutions. Many companies are staying private longer, allowing more value creation to happen before an initial public offering. This has encouraged investors to seek earlier opportunities in major technology and growth companies.

Growing Demand for Private Company Exposure

Interest in pre-IPO investing has intensified as investors look for access to companies before they reach public exchanges. Several platforms have explored tokenized versions of private company exposure, but some offerings have faced criticism because they may not provide direct ownership of underlying shares.

OpenAI previously warned investors that certain tokenized products linked to its name did not represent actual equity ownership. The distinction between economic exposure and legal ownership remains a key issue as tokenized finance develops.

Long-term interest in private markets has also been supported by historical performance data. Research cited by the American Investment Council showed private equity delivered stronger returns than the S&P 500 Index over several long-term periods, despite public markets performing better in some shorter time frames.

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Citi’s blockchain marketplace signals a deeper connection between traditional banking and digital asset technology. While tokenized private shares could open new investment opportunities, the future of the sector will depend on regulation, transparency, and whether investors receive genuine ownership rights.

As companies continue delaying public listings and private markets expand, tokenization may become a key tool in bringing early-stage investment opportunities closer to mainstream finance.

Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.