How Bitcoin Depositary Receipts Could Revolutionize Crypto Investing

If you are a crypto enthusiast, you might have heard of the long-awaited bitcoin exchange-traded funds (ETFs) that could soon be approved by the U.S. Securities and Exchange Commission (SEC). But did you know that there is another innovative product that could offer a similar benefit to crypto investors?

Introducing bitcoin depositary receipts (BTC DRs), a new offering from a startup called Receipts Depositary Corporation (RDC), founded by a group of former Citigroup executives. BTC DRs are similar to American Depositary Receipts (ADRs) for foreign stocks, which allow U.S. investors to access foreign markets without dealing with currency conversions, foreign taxes, or regulatory hurdles.

BTC DRs work within U.S.-regulated market infrastructure and are cleared through the Depository Trust Company (DTC), the largest securities depository in the world. This means that BTC DRs can be easily traded, settled, and custodied by U.S. financial institutions, just like any other security.

RDC announced the launch of the first BTC DRs on Thursday, saying that it expects to issue them soon to qualified institutional buyers (QIBs) who are exempt from registration under the Securities Act of 1933. According to the company, RDC is backed by major institutions, including Franklin Templeton, BTIG, and Broadhaven Ventures. Moreover, Broadridge Corporate Issuer Solutions will act as the transfer agent while Anchorage Digital Bank National Association will handle custody of bitcoin.

Anchorage Digital publicly announced its partnership with Receipts Depositary Corporation on Thursday. “We are proud to announce our partnership with Receipts Depositary Corporation … As the only OCC-chartered digital asset bank, we look forward to supporting the launch of the first bitcoin depositary receipt,” the bank said.

Ankit Mehta, RDC’s co-founder and CEO, who is a former executive at Citigroup, said in an interview with Bloomberg that RDC’s offering will provide a “complementary” product to spot bitcoin ETFs that the SEC is rumored to approve early next week. He explained:

“We are essentially 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 and enjoy direct ownership in the U.S. clearances.”

Mehta added that BTC DRs will also offer tax advantages, as they will be treated as securities rather than property, which could lower the capital gains tax rate for long-term holders. He also said that BTC DRs will have lower fees than bitcoin ETFs, as they will not charge any management or performance fees.

BTC DRs could be a game-changer for the crypto industry, as they could attract more institutional and retail investors to the bitcoin market, while also providing more liquidity, transparency, and security. BTC DRs could also pave the way for other crypto depositary receipts, such as for ethereum, stablecoins, or even decentralized finance (DeFi) tokens.

If you are interested in learning more about BTC DRs, you can visit the RDC website or follow them on Twitter. You can also sign up for their newsletter to get the latest updates on their launch and availability. Don’t miss this opportunity to be part of the crypto revolution!