Giving institutional investor’s access to Crypto market without owning crypto assets directly, U.S. multinational bank Citigroup is developing cryptocurrency item, anonymous sources informed Business insider September 9.
To let investors trade crypto indirectly Citigroup will reportedly use a revamped version of the ADR (American depositary receipts) which represents securities of a non-US company since the 1920s, despite taking a concentrated approach to cryptocurrency.
Digital asset received (DAR) will be the end product, the sources claim.
According to the “people with knowledge of the plans,” a DAR “works much like” an ADR, both “giving U.S. investors a way to own foreign stocks that don’t otherwise trade on U.S. exchanges.”
“The foreign stock is held by a bank, which then issues the depository receipt. In this case, the cryptocurrency is held by a custodian and the DAR is issued by Citigroup,” Business Insider explains, paraphrasing the sources.
While Citigroup declined to comment and for a potential roll out no time frame was mentioned, the news comes at a salient time for cryptocurrency markets.
September 9 saw U.S. regulator the Security and Exchange Commission (SEC) issued a temporary ban on ETNs-fast Crypto-related exchange trade notes, citing “confusion” among investors.
While the SEC has rejected a string of Bitcoin ETF (Ethereum Exchange Trade Funds) applications in August, the fate of multiple Bitcoin and ETFs remains a hot topic of conversation, coin telegraph reported.