Citigroup to Enable Crypto Trading Through Digital Asset Receipts

Citigroup to Enable Crypto Trading Through Digital Asset Receipts

Bitcoin News
September 10, 2018 by Sandra Onyeiwu
1337
New York-based Citigroup bank Inc. has developed a new mechanism for investing in cryptocurrencies such as Bitcoin, according to a person with knowledge of the plans. 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
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New York-based Citigroup bank Inc. has developed a new mechanism for investing in cryptocurrencies such as Bitcoin, according to a person with knowledge of the plans.

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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