Citigroup, a US-based investment banking company, have recently come up with a new strategy that has the aim of making investing in cryptocurrencies less risky. At the moment, many people are getting put of investment because of how volatile the market is, and there is a very real chance that money could be lost rather than gained.
In order to combat this risk, Citigroup have created DARs, which stands for Digital Asset Receipts. This allows for people to ‘invest’ in cryptocurrencies, but without actually owning them. The model is very similar to the American Depositary Receipt, but instead of investing in stocks, people will putting their money on crypto.
When someone makes an investment, the digital currency in question will instead be held by a custodian, and be invested through the Depository Trust and Cleaning Corporation, which is a finance company.
The company are providing a method that asset managers can get behind, because it is a way to invest that it is likely that they will already be familiar with.
It is still unknown about when the project will launch, and negotiations are still underway as to the exact way in which people can invest. However, reports suggest that Citigroup is already reaching out to some potential partners.
This news comes soon after the announcement that the investment banking giant of Goldman Sachs had bailed on its proposal to create a cryptocurrency trading desk. This announcement is the reason that many people believe that the cryptocurrency market in general had such a poor week last week, with many digit coins dropping sharply in value in just a matter of hours.