News coming from an insider source alleges that international banking giant Citigroup is developing a new product for trading digital assets like Bitcoin (BTC).
The new product is dubbed Digital Asset Receipt (DAR) or ‘digital’ American Depository Receipt (ADR), depending on which news story you read.
According to an exclusive Business Insider report, the new instrument will provide investors the ability to trade directly in cryptocurrencies without owning the assets or necessitating a cryptocurrency exchange. The idea is to open up cryptocurrency trading to traditional investors who are wary of the security concerns related to crypto exchanges.
The process involves a custodian service holding physical assets of the cryptocurrency and Citigroup issuing a DAR to the investor. Clearing and settlement services will reportedly be provided by the Depository Trust and Clearing Corporation Wall Street.
Considering there has been no official word from Citigroup and fake news is rampant at the moment, I would take the news with a pinch of salt. However, if it does turn out to be true it could take the spotlight off upcoming Bitcoin exchange-traded fund (ETF) decisions since it would effectively offer the same service.
How exactly the U.S. Securities and Exchange Commission (SEC) view regulations on the new proposal is unclear. Considering its stance regarding Bitcoin ETF’s, it seems somewhat hopeful that the commission would so easily allow this new product.
Whatever the reality turns out to be, it’s just one more piece of the crypto puzzle worth keeping an eye on.