A cohort of former Citigroup executives is venturing into uncharted territory, introducing bitcoin-backed securities without seeking approval from the U.S. Securities and Exchange Commission (SEC).
Receipts Depositary Corp. (RDC) is set to unleash depositary receipts akin to American depositary receipts (ADRs), which represent foreign stocks on U.S. equity exchanges. Dubbed “BTC DRs,” these receipts will be targeted at institutions and will undergo clearance through the Depository Trust Company (DTC), as outlined in a recent press release.
RDC plans to roll out bitcoin depositary receipts in transactions exempt from registration under the Securities Act of 1933, with the offering slated to commence in the upcoming weeks. Ankit Mehta, the co-founder and CEO of RDC, highlighted the advantages of using depositary receipts, emphasizing their established structure, direct ownership of the underlying asset, and seamless integration into institutional products.
The move by RDC is a strategic response to institutional demand for bitcoin investments, aiming to fill a gap that a traditional spot exchange-traded fund (ETF) may not fully satisfy. Notably, the SEC is on the verge of greenlighting the listing of a spot BTC ETF in the U.S.
In a departure from the traditional approach where shares in bitcoin ETFs are redeemed for cash, these depositary receipts offer investors direct ownership of bitcoin. Anchorage Digital Bank National Association is set to provide custody for the underlying bitcoin, adding an extra layer of credibility to RDC’s groundbreaking initiative.
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