Institutional Investment is Crypto Made Easy by Citigroup’s New System
The plan has not yet been announced officially, with sources indicating that it is ready for launch.
Citigroup Makes it Easy For Institutions to Invest in Cryptos
Institutions have recently shown interest in joining the crypto world due to the future they hold. However, a major impediment has been the large sum that is needed to start rolling. However, Citigroup seems to have found the solution.
The American bank has come up with a model for institutions to put their money in cryptos without necessarily owning them. Sources privy to the plan indicate that the plan is to have cryptos integrated into established regulatory systems. Investors will then be provided with a less stressful way of investing in assets.
Citi’s instrument has been dubbed DAR. In operations, it similar to ADR, which has been in existence for many decades. Under the DAR, cryptos are stored by an individual while Citi will issue the DAR. It will be the role of Citi to inform the Depository Trust.
According to sources, such an initiative will provide legitimacy and providing investors with means of following their investments within a platform that they are accustomed to. With the news, many crypto lovers are optimistic that more institutions will come on board.
For some time now, traders have been hoping that at some point we will have institutional money integrated into cryptos. Such an inclusion has been projected to improve earnings by fiat money. Such news always propels the market higher boosting prices of major cryptos. However, the boost is always temporary.
Barriers Along The Way
However, the inclusion of Institutional money does not come easy. We have a number of regulations that need to be adhered to for smooth market operation. At the moment, many nations across the globe are working on regulations meant to realize the inclusion of institutional money.
A major challenge has always been the establishment of a specific framework for their investment avenues. The second challenge is security. There is a need for strong security measures that can provide financial solutions. Such service includes custodial services.
The last step to consider is matters of liquidity. Many traders wish to perform huge purchases. Unfortunately, major cryptocurrencies lack a significant amount of fiat currency. The currencies act like a back up for the investments. Only bitcoin and ethereum have liquidity.