News out of Citigroup could be a game-changer.
The Digital Asset Receipt
The firm just created a new financial product called a “digital asset receipt.” Reportedly, it will allow institutional investors a less-risky way of investing in cryptocurrency.
According to Business Insider:
“Citi has developed an instrument it’s calling a Digital Asset Receipt or DAR. It works much like an American Depository Receipt or ADR, which has been around for decades to give US investors a way to own foreign stocks that don’t otherwise trade on US exchanges. The foreign stock is held by a bank, which then issues the depository receipt.”
If this gives institutional and wealthy investors a new solution to buy in, it could help accelerate cryptocurrency adoption quicker than hoped.
Wall Street’s embrace of digital currencies will only intensify. Coinbase, for example, believes that institutions, not retail traders, will lead the next bull market.
Even the NASDAQ is open to becoming a platform for trading cryptocurrencies. “Certainly Nasdaq would consider becoming a crypto exchange over time,” Nasdaq CEO Adena Friedman told CNBC. “If we do look at it and say & ‘it’s time, people are ready for a more regulated market’ for something that provides a fair experience for investors.”
Goldman could Help Institutions
One of the biggest complaints regarding institutional adoption of cryptocurrency is trust.
After all, holding virtual currencies in an exchange on the other side of the world can often be risky. That’s especially true with constant reports of hacked exchanges.
However, the trust issue may soon change.
That’s because Goldman Sachs may offer custody services for cryptocurrency funds.
That means Goldman would hold the securities on behalf of the funds, which then cuts the risk for clients worried about potential loss. Should that happen, the bank could provide quite a boost to the number of funds betting on virtual currency.
Want the latest crypto news? Join our Telegram Channel