The bank aims for other financial institutions to join the initiative. The Citigroup project is currently accessible only to foreign investors. (JOHN TAGGART FOR WSJ) Citigroup has created a blockchain-based platform allowing its wealthy and institutional clients to trade shares of private companies. Citigroup is introducing a method for its institutional and high-net-worth clients to trade private-company shares via blockchain, an initiative it hopes other Wall Street banks will adopt. The bank noted it is currently negotiating with several major private companies to participate. This project aims to expand access to private firms at a time when companies are delaying their public offerings, and Wall Street is highly anticipating the major upcoming IPOs of SpaceX, Anthropic, and others. This initiative allows clients to hold private-company shares essentially "right next to their Apple stock," stated Artem Korenyuk, Citi’s global lead for digital assets enterprise alignment and services enablement. Initially, the program is restricted to foreign investors and involves transaction and maintenance fees, but Citi intends to roll it out to U.S. investors in the future. The underlying infrastructure is also available for use by other banks, according to Citi. The system operates using depositary receipts—securities that enable investors to purchase stakes in foreign entities—that are both authorized and tokenized. Citigroup will issue these securities and serve as their custodian. Banks are increasingly rushing to implement the blockchain technology primarily known for supporting cryptocurrencies. As reported by The Wall Street Journal, Citi, JPMorgan Chase, and other financial institutions aim to introduce a tokenized deposit system next year. Tokenized money-market funds and plans for tokenized security platforms have also been emerging. Citi mentioned that tokenized depositary receipts provide a simpler and more reliable alternative to other methods investors use to access private firms, such as special-purpose vehicles (SPVs), which have recently faced increased scrutiny. With those older structures, “investors don’t know what they’re actually buying,” Korenyuk remarked. “This is a very clear alternative model.” The initiative's blockchain is managed by the Switzerland-based firm SIX. The bank is also open to exploring extensions to other blockchain networks. Citi, which has been striving to resolve past operational issues, collaborated across its five business divisions when the project launched its first trade. In this initial transaction, its wealth clients invested in Kaleido, an institutional platform for tokenization and digital assets. “That definitely would not have happened a number of years ago under different leadership,” Korenyuk added.