Bitcoin Depository Receipts (BTC DRs) Introduced as a Fresh Option for Institutional Investors
Former Citigroup executives have launched a new product for institutional investors called Bitcoin depository receipts (BTC Drs), according to Bloomberg. These securities are similar to American depositary receipts (ADRs) for foreign stocks and will provide institutional investors with direct ownership of Bitcoin through US-regulated market infrastructure and cleared through the Depository Trust Co. (DTC).
The startup, Receipts Depositary Corporation (RDC), plans to issue the first BTC DRs to qualified global institutional investors in transactions exempt from registration under the Securities Act of 1933. This offering will provide a product that complements Bitcoin ETFs, as it offers direct ownership of Bitcoin to qualified institutions.
Ankit Mehta, co-founder and CEO of RDC, explained, “We are essentially a conversion tool for asset owners today, whether they are hedge funds, family offices, corporations, or large institutional investors that want to convert their Bitcoin into a DTC-eligible security and enjoy direct ownership in the US clearing system.”
The co-founders of RDC believe that BTC DRs will be appealing to institutions because they offer market standards from traditional finance, such as depositary receipts, to the digital asset ecosystem. According to Diogo Mónica, co-founder and president of Anchorage Digital, “bringing market standards from traditional finance like depositary receipts to the digital-asset ecosystem will be a major theme heading into 2024.”
In conclusion, Bitcoin, the oldest cryptocurrency, aims to eliminate the need for a centralized clearinghouse by utilizing its decentralized blockchain to automatically verify, record, and settle transactions between users. BTC DRs, also known as Bitcoin Digital Receipts, empower institutional investors with direct ownership of Bitcoin through US-regulated market infrastructure and clearing through the Depository Trust & Clearing Corporation (DTCC).