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This article was published on September 10, 2018

Citigroup is making cryptocurrency investments less risky for Wall Street

The banking titan now lets you invest in cryptocurrencies without owning them

Citigroup is making cryptocurrency investments less risky for Wall Street
Neer Varshney
Story by

Neer Varshney

Former TNW writer

The US-based investment banking titan Citigroup has figured out a way to make cryptocurrency investments less risky.

The company has created what it’s calling “Digital Asset Receipts (DARs),” which will allow its customers to invest in cryptocurrencies without having to own them,  according to Business Insider.

Citigroup’s DAR services will work much like its American Depositary Receipt (ADR) services. ADR allows for US investors to trade foreign stocks that don’t otherwise trade on the country’s exchanges.

The cryptocurrency will be held by a custodian and invested through the Depository Trust & Clearing Corporation, a finance company that provides clearing and settlement services to Wall Street.

With DAR, Citigroup is providing assets managers and hedge funds a way to invest in cryptocurrencies that they are already familiar with. The company expects to overcome their aversion towards digital assets by making it less risky and trustable.

It is worth noting that Citigroup hasn’t yet made any official announcement for this project. It’s not yet known when the project will actually launch. However, according to the report, the company is already reaching out to potential partners.

It also remains to be seen how well the idea of DARs will go with the US Securities and Exchange Commission (SEC).

The SEC has persistently maintained that the cryptocurrency market suffers from market manipulation and isn’t ready for mainstream financial instruments. Indeed, the agency has rejected all exchange traded fund (ETF) proposals for cryptocurrencies it has ever received.

Another investment banking giant Goldman Sachs recently bailed on its proposed cryptocurrency trading desk citing regulatory hurdles. However, the company is still working on its custodial service.

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