Companies are staying private longer than ever, and Citi thinks blockchain is the fix. The bank has unveiled a new platform for trading tokenized shares of private companies, a direct response to what its global digital assets lead Artem Korenyuk describes as mounting pressure on liquidity in private markets.

The logic is straightforward. When companies like SpaceX and Anthropic delay their IPOs indefinitely, early investors and employees get stuck holding illiquid paper. Citi’s answer is to wrap those private stakes into tokenized depositary receipts that can sit in a portfolio right next to shares of Apple or any other public stock.

How the platform actually works

Citi issues tokenized depositary receipts on a blockchain, representing ownership interests in private firms. Those receipts can then be traded on secondary markets, giving holders something they currently lack: a way out that doesn’t require waiting years for an IPO or acquisition.

The key distinction from existing private share arrangements, according to Korenyuk, is clarity. Traditional secondary markets for private shares are notoriously opaque, with murky ownership structures and limited price discovery. The tokenized model provides clearer ownership records and more transparent liquidity than what currently exists.

Foreign investors get first access to the platform. US clients will have to wait, with Citi projecting a domestic rollout for 2026. That staggered launch likely reflects the regulatory complexity of offering tokenized private securities to American investors, a process that involves navigating SEC oversight and existing securities law frameworks.

The practical implication for portfolio construction is notable. Investors have traditionally needed separate infrastructure, different custodians, different reporting systems, to hold private and public positions. Citi’s platform collapses that divide, letting tokenized private shares trade alongside conventional equities within standard investment portfolios.

The IPO drought driving this

The result is a massive pile-up of value locked in private markets. Employees with stock options can’t monetize them. Limited partners in venture funds face longer holding periods. And institutional investors who want exposure to high-growth companies increasingly have to access them through private channels rather than public exchanges.

The bank isn’t alone in this conviction. Citi has been expanding its digital asset initiatives broadly, with an internal outlook called Tokenization 2030 that frames tokenized assets as a key growth area for the rest of the decade.

What this means for investors

For retail investors, the picture is less clear. The initial foreign-investor focus and 2026 US timeline mean most individual American investors won’t see this product anytime soon. And even when it arrives domestically, accreditation requirements and minimum investment thresholds could limit access.

Look, there are structural challenges that won’t disappear overnight. Private companies still control whether their shares can be transferred at all. Many have right-of-first-refusal clauses or outright transfer restrictions in their shareholder agreements. A tokenization platform doesn’t override corporate governance.

The risk for investors is also worth noting. Private company valuations can be volatile and are often based on the most recent funding round rather than continuous market pricing. Tokenizing those shares doesn’t magically create the deep, liquid order books that public markets enjoy. Trading volume on these tokenized receipts could be thin, leading to wide bid-ask spreads and potential difficulty exiting positions at fair value.