“The Innovator’s Dilemma” is a business-school classic, and for years the question was how it would play out for CSDs once tokenization arrived. The last few months suggest a different plot than Christensen wrote.

Last week, Clearstream, Deutsche Börse’s post-trade arm, unveiled a “digital-first, fully hybrid” platform for traditional and tokenized securities.

Most of the parts already had their own press releases: D7, D7 DLT, MiCA crypto custody, the Circle stablecoin partnership. What’s new is that Clearstream now markets them as one holistic infrastructure, covering the full lifecycle from issuance and custody through settlement, asset servicing and collateral reuse.

So, less a debut than a consolidation. But the scale is the story. Clearstream already holds €22 trillion in assets under custody, and the ambition is to drag that mountain onchain, without making clients give up the systems they already run.

We asked Thilo Derenbach, who runs digital securities services at Clearstream, what that means in practice. A few things stood out:

  • Clearstream wants to enlarge its collateral pool to include both securities and crypto assets, then make that collateral usable across traditional and onchain venues.

  • The token is supposed to represent the actual security. Clearstream says its tokenized securities should carry dividends, voting and corporate actions, rather than behave like today’s synthetic “tokenized stock” wrappers.

  • Clients will need a place to hold and manage them. Clearstream is building its own wallet so institutions can manage tokenized securities inside its infrastructure.

  • Clearstream is going private-permissioned-chain first, using a Besu setup developed from the ECB’s CBDC trials. Public-chain access is the direction of travel, while interoperability with Euroclear and DTCC is being worked on at the standards level.

That last name should ring a bell, because Clearstream isn’t the only incumbent heading for production.

In the US, DTCC, whose depository holds more than $114 trillion in custody, is starting its own tokenization rollout next month, with suspiciously familiar talking points. “We’ve managed things in a ledger for 55 years,” its digital assets head Nadine Chakar told us in May. “Now we move to many more ledgers.”

The bet on both sides of the Atlantic is the same: tokenization won’t arrive as crypto rails replacing the incumbents. They’ll keep doing the one thing they’ve always done: holding the record of who owns what, just on more ledgers.

In today’s Briefing:

  • Amundi, CACEIS, and Ant International partner on tokenized products

  • Citi rolls out tokenization service for private company shares

HIGH SIGNAL NEWS

TOP STORY

Citigroup Rolls Out Tokenization Service for Private Company Shares

Private market tokenization: Last week, Citigroup unveiled a new service to tokenize Digital Depositary Receipts (DRs) for private shares, with a listing on SIX’s permissioned blockchain network. The first transaction involved a Citi portfolio company and Kaleido, a tokenization platform that works with SWIFT, HSBC, and the BIS.

  • Why it matters: The product lands as the supply of investable private equity continues to grow. US IPO activity has slowed sharply since 2021: an average of about 64 US companies went public per year between 2022 and 2025, roughly a third of the 181-per-year average from 2018 to 2021. The result is a deep pool of private equity that institutions cannot easily reach through public markets, the gap that Citi’s receipts target.

Beyond fund wrappers: Tokenization of private company shares has so far taken two main shapes. Fintech platforms like Robinhood and Kraken’s xStocks have launched tokens tracking pre-IPO names like SpaceX and OpenAI, often through synthetic structures and without the companies’ cooperation. On the institutional side, tokenization platform Securitize has built a dominant position by wrapping fund interests from managers including Apollo, Hamilton Lane, and KKR into tokenized feeder funds. Citi’s receipt-based structure marks a third path, allowing direct, bank-issued exposure to underlying private shares issued onchain.

  • “With smart contracts, you can permission access programmatically, implement lock-ups and compliance features. These characteristics of private assets that should remain by design are perfectly suited for DLT,” Cyrill Blöchlinger, Senior Business Development Manager at SIX, told Blockstories.

Good frictions, bad frictions: The receipt structure preserves more than just the technical features built into smart contracts. Confidentiality on pricing, controlled access to shareholders, and the absence of a public secondary market all stay. What gets removed is operational friction: paper-based processes, fragmentation, and the lack of standardization.

  • “In private markets, some friction is a feature, not a bug. The opportunity is to remove the friction that adds no value,” Blöchlinger added.

Non-U.S. only, for now: Beyond what gets preserved and what gets removed, the product also carries a hard regulatory constraint. Only non-U.S. wealth and institutional investors are currently eligible, in line with how the securities are structured under Swiss law. Citi has signaled a longer-term ambition to extend access to U.S. investors, but that depends on a different regulatory setup.

The liquidity question: A further consequence of those design choices is that tokenization itself does not create liquidity that wasn’t there. SIX does not run a matching engine for these securities and does not publish a reference price; trades happen OTC, with buyers either approaching existing holders or going through Citi to source.

  • “What you cannot do with tokenization, or with any technology, is create liquidity out of nothing. What you can do is make it more seamless and standardized to get access to private assets, remove friction, and that, in return, may increase the liquidity,” Blöchlinger noted.

Outlook: That increase, if it comes, will be incremental. Citi has signaled that its ambition is for the service to extend beyond its current footprint over time, both to other banks and to blockchain networks beyond SIX’s permissioned chain. The bank’s own 2030 forecast points to relatively slow growth in the category: it estimates the addressable private equity market at $12 trillion, but expects only around $100 billion to be tokenized in its base-case scenario, compared with $3.6 trillion in tokenized public equities.

Daniel Coheur joined Apex Group as Global Head of Digital Assets following the fund administrator’s acquisition of Tokeny, the Luxembourg-based tokenization platform he co-founded.

Why does private-market tokenization make particular sense for a large bank like Citi?

Today, a large share of private market investing flows through SPVs and club deals built by third-party intermediaries. As a result, banks and asset managers often have no visibility into the investors behind these structures. The wealthy and ultra-wealthy individuals who allocate through these vehicles are largely invisible to the institutions whose products they hold.

Tokenization changes the economics of that intermediation. SPVs exist largely because directly managing thousands of investors on a cap table is operationally expensive, and asset managers have set high minimums to limit that complexity. With blockchain-based records and automated workflows, many of those costs come down. A manager like BlackRock that today requires $5 million minimums could realistically bring that closer to $250,000, with investors held directly on the cap table rather than aggregated behind opaque vehicles.

Large banks are positioned to lead this shift for two reasons. They have the capital to invest in the infrastructure required, and they already operate the wealth and institutional distribution channels through which these instruments will move. The combination is hard for non-bank entrants to replicate.

Alan Konevsky is Chairman and Chief Executive Officer of tZERO, a regulated U.S. infrastructure provider for tokenized assets that offers broker-dealer, exchange, custody, clearing, and compliance capabilities to financial institutions.

Why have liquid assets, rather than private markets, driven tokenization adoption so far?

When tokenization started, the assumption was that blockchain would transform finance’s most illiquid corners by simply putting them onchain. That has not happened, because tokenization is only the infrastructure layer. Every marketplace also needs supply and demand, and making a tokenized private market work requires supply from asset managers willing to upload portfolios, demand from distribution partners with established user bases, and dedicated market makers providing liquidity at workable spreads.

That is why the strongest adoption is happening in liquid asset classes like money market funds and increasingly public equities. They are easy to understand, have rich disclosures, deep investor bases, and most importantly have direct onchain utility, slotting into DeFi use cases like collateral management and lending. Tokenization adds new access points and integrations on top of markets that already work.

Private markets will likely follow a different path. Rather than leading the tokenization movement, they may ultimately benefit from the infrastructure being built around these more liquid assets. As regulated custody, settlement networks, market making, and distribution channels mature, private assets will be able to plug into an ecosystem that already exists instead of having to build one from scratch.

  1. The State of the European Crypto Market (Kaiko & Bitvavo) — The report examines how MiCA-driven regulatory certainty, exchange competition, and improving liquidity have fueled record EUR-denominated trading volumes, accelerated adoption of euro stablecoins, and helped EUR markets reach liquidity levels comparable to their USD counterparts.

  2. The Anatomy of Stablecoin Transactions (BIS) — This paper challenges the common assumption that stablecoin transfers are synonymous with payments. It finds that they are primarily embedded in complex, programmable financial workflows, including trading, lending, liquidity provision, and settlement.

→ Want more? Visit Blockstories Library for a curated selection of 120+ reports on digital assets.

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Disclaimer: The information provided in the Institutional Briefing by Blockstories does not constitute investment advice. Accordingly, we assume no liability for any investment decisions made based on the content presented herein.

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