Citi, one of the largest international banks, and the Swiss company SDX announced cooperation at the Point Zero Forum.
The announced partnership will focus on solving problems related to traditional private markets for global issuers and investors. As part of this collaboration, Citi will tokenize, settle, and keep safe assets on the SDX central digital securities depository platform. The financial institution will also provide late-stage pre-IPO shares to institutional and eligible investors on the mentioned platform.
Tokenization of assets has several advantages. In this case, among other things, increased liquidity is provided. As part of standard practice, traditional assets such as real estate and works of art are difficult to sell. Tokenization allows you to split these assets into small parts. This makes the assets available to more investors. Tokenization also ensures transparency and security. As part of the use of blockchain technology, all transactions are recorded in an immutable registry. This reduces the risk of fraud. This threat has been particularly relevant lately. In addition to technological solutions, user awareness is important in the context of countering the risk of fraud. It’s not a difficult task. An Internet query, such as how to know if my camera is hacked, will let the user know about signs of cybercrime-related activity. This is relevant in the context of fraud, which is increasingly becoming digital. As for the benefits of tokenization, it is also worth mentioning the reduction of transaction costs, global availability, and automation of processes.
Citi and SDX are currently developing a scalable solution that is expected to generate the result that shares of fast-growing venture-backed private companies will become more accessible to investors. The launch of this solution is scheduled for the third quarter of 2025. Issuers will have access to a new and compatible model that will simplify the liquidity management process for novice investors and employees. Cap table control will also be enabled.
Within the framework of the cooperation, Citi’s experience in the area of securities and investment services in the private market will be used. The SDX infrastructure for digital securities will also be applied.
