HomeNewsBitcoin ETFs Face Competition from Receipts Depositary Corp's New Product

Bitcoin ETFs Face Competition from Receipts Depositary Corp’s New Product

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  • A team of former Citigroup Inc. executives has introduced Bitcoin depositary receipts, providing institutional access to Bitcoin without needing SEC approval.
  • These Bitcoin depositary receipts, akin to American depositary receipts for foreign stocks, offer direct Bitcoin ownership and are DTC-eligible.

A New Era for Bitcoin Investment

In a bold move diverging from the traditional regulatory pathways, a cadre of former Citigroup Inc. executives has unveiled a novel financial instrument: Bitcoin depositary receipts (BTC DRs). This initiative represents a significant stride in bridging the gap between the burgeoning world of digital assets and established financial structures.

Redefining Bitcoin Accessibility for Institutions

Similar in concept to American depositary receipts, which have long facilitated U.S. investment in foreign stocks, BTC DRs are designed to grant institutional investors direct access to Bitcoin securities. This access is to be furnished through U.S. regulated market infrastructure, with clearance through the Depository Trust Co.

Ankit Mehta, the co-founder and chief executive of Receipts Depositary Corporation (RDC) and former Citigroup executive, explained:

“Our goal is to transform Bitcoin into a DTC-eligible security, simplifying ownership for institutions like hedge funds, family offices, and large investors.”

Strategic Partnerships and Custodial Solutions

RDC’s approach involves partnering with Broadridge Corporate Issuer Solutions as the transfer agent, while Anchorage Digital Bank National Association will be entrusted with the custody of the underlying Bitcoin. Backed by heavyweight investors like Franklin Templeton, BTIG, and Broadhaven Ventures, RDC’s Bitcoin depositary receipts are poised to redefine how institutions engage with digital assets.

Complementing Traditional Bitcoin ETFs

While Bitcoin ETFs have been the focal point of market attention, especially with the SEC’s impending decisions, RDC’s BTC DRs aim to provide a complementary product. Unlike Bitcoin ETFs, which are redeemed for cash, depositary receipts offer a more direct ownership model. This approach addresses concerns specific to regulated institutions, such as security risks and regulatory ambiguity, echoing the solutions American depositary receipts once provided for U.S. investors in foreign companies.

The Intersection of Traditional and Digital Finance

Ishaan Narain, one of the co-founders of RDC, emphasized the importance of integrating reliable market infrastructure into the digital asset space.

“We’ve aimed to replicate the success of traditional financial instruments in a digital context, ensuring that our product meets the stringent requirements of institutional investors.”

In conclusion, the Bitcoin depositary receipts initiative by RDC heralds a significant development in the digital asset industry. It represents a fusion of traditional financial mechanisms with the innovative world of cryptocurrency, offering a novel pathway for institutional investment in Bitcoin, free from the usual regulatory constraints.

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Godfrey Benjamin
Godfrey Benjamin
Godfrey Benjamin is an experienced crypto journalist whose primary goal is to educate everyone about the prospects of Web 3.0. His love for crypto was sparked during his time as a former banker when he recognized the clear advantages of decentralized money over traditional payments. Business Email: info@ethnews.com Phone: +49 160 92211628