Bitcoin Depository Receipts (BTC DRs): A New Offering for Institutional Investors
Mustafa Mulla4 Jan 20242 min read
As the wait for the approval or refusal of a spot Bitcoin ETF intensifies, a group of former Citigroup executives has unveiled a new product for institutional investors called Bitcoin depository receipts (BTC Drs), as Bloomberg reported.
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).
Direct Bitcoin Access for Institutions
The startup, Receipts Depositary Corporation (RDC), aims to issue the first BTC DRs to qualified global institutional investors in transactions exempt from registration under the Securities Act of 1933. The offering will provide a product that is complementary to Bitcoin ETFs, as it offers direct ownership of Bitcoin to qualified institutions.
According to Ankit Mehta, co-founder and CEO of RDC, “We are really a conversion tool for asset owners today, whether they are hedge funds, family offices, corporations, or large institutional investors that want to take their Bitcoin and convert it into a DTC-eligible security and enjoy direct ownership in the US clearances.”
Market Standards from Traditional Finance
The co-founders of RDC believe that BTC DRs will be something institutions are more comfortable with since they offer market standards from traditional finance like 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.”
To conclude, the oldest cryptocurrency, Bitcoin, is designed to eradicate the need for a centralized clearinghouse by leveraging its decentralized blockchain to automatically verify, record, and settle transactions between users. A new offering called BTC DRs (Bitcoin Digital Receipts) empowers institutional investors with direct ownership of Bitcoin through US-regulated market infrastructure and clearing through the Depository Trust & Clearing Corporation (DTCC).
