Citigroup Inc., the New York-based multinational investment bank and financial services corporation, is set to offer institutional investors the opportunity to trade directly in cryptocurrencies such as Bitcoin.
The bank will manage crypto custody via Digital Asset Receipt (DAR), according to sources with knowledge of the plans reported in the Business Insider. It is also claimed that the new product launch functions similar to exchange-traded funds (ETFs) or American Depositary Receipts (ADR), a type of security that originated in the 1920s for non-US companies. Like the latter, the DAR allows investors to make their investments even if they do not own or possess any direct asset or stocks. It is also a less-risky approach that will benefit the likes of hedge funds investors and asset managers.
The Business Insider also summarised that the “foreign stock is held by a bank, which then issues the depository receipt [and] in this case, the cryptocurrency is held by a custodian and the DAR is issued by Citigroup.”
However, at the time of writing, a representative from Citigroup declined to give a comment regarding their plans on crypto custody solutions.
Citigroup is the latest line of major banks in the US that offers crypto custody solutions. Other banks that followed similar patterns include Goldman Sachs, JPMorgan and Morgan Stanley.
As of now, Citigroup’s crypto custody solutions areare a preliminary stage and it is yet unclear when they will officially launch the DAR.
