Citigroup plans venture for trading tokenized shares in private companies

Citigroup is creating a venture that would enable clients to trade tokenized shares of private companies. The platform would represent ownership stakes as digital tokens on a blockchain, allowing transfers without traditional settlement processes.

Background on tokenization Tokenization converts ownership rights into digital records that can be bought and sold on electronic platforms. Financial institutions have tested similar systems for bonds and funds in recent years. The approach could reduce administrative steps required for private-share transactions.

Potential effects on investors Clients would gain the ability to adjust holdings in private firms more frequently than current private-market practices allow. Settlement times could shorten from weeks to minutes under the proposed system. The bank has not disclosed a launch date or specific private companies that would participate.