According to a Bloomberg report released on January 4, former Citigroup executives would sell Bitcoin-backed securities.
They claim that these securities do not require permission from US regulators. The issuer will launch a “Receipts Depositary Corporation, or RDC,” due to the blatant action.
Bitcoin Depositary Receipts, which work similarly to American Depositary Receipts representing international stocks, will constitute the securities. The company claims that Depository Trust Co. will clear the BTC DR offering and give institutions access to shares via the US-regulated market infrastructure.
The primary distinction from a Bitcoin ETF is that according to RDC, depositary receipts—the first of their kind—allow eligible institutions to acquire Bitcoin directly.
The issuers claim that some regulated institutions do not like to purchase Bitcoin because of the difficulties the cryptocurrency markets confront, such as security threats and regulatory uncertainties. A product that will “complement” the Bitcoin ETF is what the RDC plan offers.
Ankit Mehta, a former Citigroup executive and co-founder of RDC, claims:
“We are a conversion tool for asset owners today, whether they are hedge funds, family offices, corporations, large institutional investors, that want to take their Bitcoin and convert it into a DTC-eligible security.”
With all of the excitement surrounding Bitcoin investing, the new product might gain popularity with investors. According to the issuers, the biggest distinction with BTC DR is that it doesn’t need US Securities and Exchange Commission (SEC) approval.
The most recent release by the group may present an opportunity for some institutional investors to onboard capital into cryptocurrency markets, given the difficulties and various factors that the SEC is currently debating concerning the spot Bitcoin ETF, regulatory uncertainty, and risk aversion to traditional financial markets.
