Last week, we discussed moves by Goldman Sachs to create easier access to crypto trading for institutions. "Custodial solutions might both make a future crypto-related thumbs up from the SEC more likely but also make it somewhat less necessary," The Block explained that while numerous efforts to get an exchange-traded fund (ETF) approved have been shut down, other methods might serve as an end around.
Today's news is that Citi may be thinking similarly. Its proposed "digital asset receipt" (DAR) would work the same way for crypto American depositary receipts, or ADRs, do for owning foreign stocks that don't currently trade in the U.S. Citi would work through a custodian, which would actually own the cryptocurrency. It would then issue a receipt with a key Wall Street intermediary, the Depository Trust & Clearing Corp., to confirm the ownership. Investors could, in theory buy these DARs in almost any quantity and fulfill their requirements as this method operates within existing regulatory structures.