Citigroup, an American banking conglomerate, plans to release a new tool for crypto investments dubbed "Digital Asset Receipt" (DAR), or receipts for crypto assets. The new tool will allow owners to trade digital currencies without owning them directly.
DAR will operate as an improved version of American depositary receipts (ADR), through which investors can trade sets of securities not represented in the US market. The digital assets themselves will be stored by a separate custodian. As ICO Journal writes, the new instrument fully complies with American legislation.
According to the sources of the publication, the bank will act as an agent that produces DAR. In this case, regulators can allow tradings through intermediaries without direct possession of coins. In addition, Citigroup is one of the largest ADR issuers in the world, and this experience will be useful in operations with a new tool.
WHY IS IT IMPORTANT?
- If the instrument is approved, institutional investors will have a new opportunity to enter the cryptocurrency market. However, the position of the regulator is very difficult to predict, given the recent actions of the U.S. Securities and Exchange Commission. Applications to open a Bitcoin-ETF so far have received red light only, and last weekend the agency has suspended ETN trade from XBT Provider.