Manhattan-based bank Citigroup has reportedly come up with a solution that can diminish the risk for hedge funds and companies that manage their customers’ assets working with crypto can face and developed a corresponding investment tool. The new product is dubbed Digital Asset Receipt.
Until the bank actually released the Digital Asset Receipt, the digital coins will be temporarily stored by a third party. When the tool is issued, Citigroup will inform the necessary higher standing institutions to make the new type of class legitimate and investors will get a new method of keeping an eye on their investments.
A “Crypto” reply to the American Depository Receipt
The new investment tool is expected to operate similarly to the American Depository Receipt (ADR). The latter enables US-based investors to get hold of overseas stocks that cannot be found on local markets. With the ADR, US residents buy foreign assets but do not actually own them. They just get a depository receipt and a bank steps forward as a custodian that stores the assets.
Citigroup by now has developed into one of the largest ADR providers globally, having dipped in this sphere about 90 year ago.
However, Citigroup reps do not say when they intend to launch the new investment tool. Besides, it is doubtful whether the regulators will approve of the ‘crypto ADR’ after the SEC has recently rejected several Bitcoin ETFs.