According to Business Insider and other sources, Citigroup, the major investment bank based out of New York, has now created a brand-new way for new investors to invest in cryptocurrency, without actually needing to hold possession of it.
Also known as the Digital Asset Receipt, the DAR will be a collaboration between Citigroup’s capital markets team and their depository receipts team. Designed as a way to lure leery investors to the crypto-markets, the project is said to “be a game changer for the industry.”
A New Low-Risk Way To Invest
The project is a new investment tool created for risk-averse investors, in hopes of drawing more investors to the markets. It will allow investors with a lower risk tolerance to invest in cryptocurrencies, without actually possessing them, or being responsible for storing them anywhere.
Today, one of the significant drawbacks to investing in cryptocurrencies is the risk of theft that comes with owning and storing the asset that you’ve invested in.
With that said, the DAR will make it significantly safer to invest in cryptocurrencies, and according to experts, the project could potentially draw millions of new investors to start investing in digital currencies.
Citi has developed an instrument called Digital Asset Receipt, which allows investing in cryptocurrencies without owning them; It works like an ADR and would place cryptocurrencies within existing regulatory regimes: Bus.Insider
— zerohedge (@zerohedge) September 9, 2018
The Way The DAR Works
When investors buy into the DAR, Citigroup will be required to contact the Depository Trust & Clearance Corp. and notify them that it has issued a Digital Asset Receipt. This will be held in their records permanently and is designed to be an extra layer of security for investors since a well-established organization will now keep their assets.
According to experts, two of the most significant problems that have been keeping major institutional investors for buying into the crypto markets are the lack of security and trust.
Therefore, Citigroup’s DAR could contribute to a massive boom in the markets by drawing in larger institutional investors, as well as millions of smaller investors, who have been hesitant to buy into the markets.
Although Citi has not yet announced when the project it will launch the new product, the bank is said to have already begun talks with potential partners for the project, and hopefully, we can expect to hear more on this later this year.
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