Citi and SDX to Launch Tokenized Pre-IPO Shares by Q3 2025: A New Era for Private Capital?

Imagine owning a piece of the next tech giant before it hits the stock market. That’s the bold promise of tokenized pre-IPO shares, and it’s about to become a reality. Citi, a global financial powerhouse, and SIX Digital Exchange (SDX), a leader in digital asset infrastructure, have teamed up to launch this initiative in the third quarter of 2025. Announced at the Point Zero Forum in Switzerland, this move aims to revolutionize the private markets using SDX’s regulated blockchain technology.

• Citi partners with SDX to tokenize pre-IPO shares.
• Launch planned for Q3 2025.
• Aims to increase liquidity and accessibility in private markets.

The partnership between Citi and SDX is a significant leap towards modernizing the traditionally opaque and manual private market ecosystem. By utilizing SDX’s regulated digital secure digital registry platform, the initiative will enable the tokenization of late-stage pre-IPO equity. Tokenization, simply put, means converting assets into digital tokens on a blockchain, making them easier to trade and manage. This offers a compliant and efficient way to enhance liquidity for early backers and employees while maintaining control over cap tables.

David Newns, Head of SDX, expressed his enthusiasm about the project, stating,

“We are excited to welcome Citi to the SDX platform. This project stands out by leveraging our regulated blockchain technology to bring efficient access to private shares, meeting strong investor demand for high-quality private assets.”

This move not only bolsters the Swiss digital asset ecosystem but also extends access to tokenized pre-IPO equities across Europe and Asia through partnerships with Sygnum and SBI Digital Markets.

Marni McManus, Citi’s Country Officer for Switzerland, highlighted the transformative potential of this initiative, saying,

“We’re helping modernize a traditionally manual, paper-heavy industry by offering digitized, scalable solutions to issuers and investors.”

Citi will serve as both a digital custodian and tokenization agent, ensuring a seamless process for all parties involved.

Ryan Marsh, Head of Innovation & Strategic Partnerships for Citi’s Investor Services and Issuer Services, emphasized the broader implications of this move, noting,

“As tokenization gains traction, we’re ensuring our clients can participate in the evolving digital asset landscape. Working with SDX supports our broader innovation agenda and reinforces our commitment to unlocking new opportunities.”

This initiative is part of a larger trend towards tokenization across various sectors. Dea Markova, Policy Director at Fireblocks, shared insights on the future of tokenization, stating,

“We’re imagining a world of tokenized everything. We’re already working with Sony in Japan—think supply chains, gaming, non-financial processes.”

This vision suggests that tokenization could soon extend beyond finance into areas like supply chains and gaming, potentially transforming how we interact with digital assets.

Switzerland’s progressive digital asset regulation has been a key factor in enabling such initiatives. The country’s regulatory framework, supported by the Swiss Financial Market Supervisory Authority (FINMA), provides a conducive environment for blockchain and tokenization projects. This partnership leverages this environment and sets a precedent for other regions to follow.

As we look towards the future, the tokenization of pre-IPO shares by Citi and SDX could democratize access to high-growth, venture-backed private companies, traditionally out of reach due to high barriers to entry and opaque processes. This move could be a game-changer for private capital, bringing it into the digital age and potentially reshaping the financial landscape.

While the potential is vast, it’s crucial to consider the challenges ahead. Regulatory hurdles, market volatility, and the impact on traditional financial systems are concerns that must be addressed. Tokenization might also raise privacy issues, as assets become more transparent on the blockchain. Despite these challenges, the initiative aligns with the ethos of decentralization and financial freedom, promoting decentralized access to private markets.

Bitcoin maximalists might argue that tokenizing traditional assets dilutes the original purpose of cryptocurrencies, which was to create a decentralized, independent financial system. However, embracing diverse applications of blockchain technology can fill niches that Bitcoin itself might not serve well, contributing to the broader financial revolution.

Key Takeaways and Questions

• What is the purpose of the Citi and SDX partnership?

  The partnership aims to tokenize pre-IPO shares to enhance liquidity and accessibility in private markets, benefiting both issuers and investors.

• When is the scheduled launch date for the tokenized pre-IPO shares service?

  The launch is scheduled for the third quarter of 2025.

• What roles will Citi play in the partnership with SDX?

  Citi will serve as a digital custodian and tokenization agent on SDX’s regulated digital secure digital registry platform.

• How does the tokenization initiative benefit issuers?

  It provides a compliant and efficient way to enhance liquidity for early backers and employees while maintaining control over their cap tables.

• What advantages does the initiative offer to investors?

  It democratizes access to high-growth, venture-backed private companies that are typically out of reach due to high barriers to entry and opaque processes.

• What broader trends in tokenization does the article highlight?

  The article discusses the potential for tokenization beyond finance, including applications in supply chains and gaming, as exemplified by Fireblocks’ initiatives.

• What significance does Switzerland have in this context?

  Switzerland is highlighted for its progressive digital asset regulation, making it an ideal environment for such initiatives.

• How does the partnership support the Swiss digital asset ecosystem?

  It supports the ecosystem by extending access to tokenized pre-IPO equities through Sygnum and SBI Digital Markets across Europe and Asia.

• How does this initiative align with the ethos of decentralization and financial freedom?

  By tokenizing pre-IPO shares on a blockchain, the initiative promotes decentralized access to private markets, aligning with the broader goals of financial freedom and disruption of traditional finance.

• What might Bitcoin purists think about this development?

  Bitcoin maximalists might argue that tokenizing traditional assets dilutes the original purpose of cryptocurrencies, which was to create a decentralized, independent financial system.

How do you think tokenized pre-IPO shares will shape the future of private investing?