Citigroup to Offer Low-Risk Crypto Investment Tool for Hedge Funds

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Mon, 09/10/2018 - 11:43
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Yuri Molchan
From now on investors can buy crypto without owning it
Citigroup to Offer Low-Risk Crypto Investment Tool for Hedge Funds
Cover image via U.Today

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.

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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.

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About the author

Yuri is a crypto journalist interested in technology and technical innovations. He has been in crypto since 2017. Believes that blockchain and cryptocurrencies have a potential to transform the world in the future in many of its aspects. ‘Hodls’ major cryptocurrencies and has written for multiple crypto media outlets. 

His articles have been quoted by such crypto influencers as Tyler Winklevoss, John McAfee, CZ Binance, Max Keiser, etc.

Currently Yuri is a news writer at U.Today and can be contacted at yuri.molchan@u.today.