Citigroup Inc. develops Digital Asset Receipt [DAR] to investigate cryptocurrencies

A recent news about American Multinational Investment bank Citigroup Inc. has revealed its plans to leap into the crypto market against existing competitors. The company has developed a new risk-free product that will create a means to investigate cryptocurrencies, a report by Business Insider stated.

DAR ‘Digital Asset Receipt’ will allow direct investigation of cryptocurrencies like Bitcoin [BTC] without the need for owning the cryptocurrencies, the report stated.

The report said that the product is structured within the four walls of the existing regulatory norms. Moreover, providing Wall Street biggies like asset managers and hedge fund investors a risk-free way of investing in “fledgling assets”.

The Citi product will behave in a similar fashion to the decades-old American Depository Receipt [ADR] which assists U.S investors to own foreign stocks that do not trade on U.S exchanges. Furthermore, the bank will issue a deposit receipt to the investor after holding the stock for them, it explained.

The report said, the cryptocurrencies will be held by a custodian, while the Citigroup will issue the DAR. Citigroup will then send a notice to Depository Trust & Clearing Corp [Wall Street middleman] which will provide clearance and settlement services.

It also stated that the project marks the collaboration between Citigroup’s capital markets origination team and the depository receipts services team.

2018 has witnessed a lot of banks trying to make its move into the crypto space targetting different ideas. Recently, Swiss company Alprockz AG announced its partnership with Swiss banks to develop a new financial and technical tool. The underlying architecture will be Ethereum based. The company intends to provide financial services by issuing ROCKZ stable coin.

Ripple recently announced that it has signed hundreds of banks in production mode. A recent report released by Reserve Bank of India indicated that the adoption of cryptocurrency is on the rise.

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