Citigroup to Enable Crypto Trading Through Digital Asset Receipts
Citigroup, which had previously taken a centralized approach to cryptocurrency, has reportedly used a revamped version of the American Depositary Receipts (ADR) – a type of security issued since the 1920s that represent securities of a non-U.S. company – to let investors indirectly trade crypto.
The bank plans to act as an agent issuing so-called digital asset receipts, or DARs, to enable trading by proxy without direct ownership of the underlying coins, said the person, who asked not to be identified.
The structure is designed to fall within existing regulatory regimes, giving investors a relatively safe method of trading in crypto.
Banks have struggled to offer direct trading in Bitcoin because of the difficulties of acting as custodians of digital assets, which are notoriously susceptible to theft from hackers.
Executives at Citigroup, which earlier this year barred purchases of Bitcoin via its credit cards, see receipts as one of the most direct ways available to mainstream investors to trade Bitcoin.
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