As the United States Securities and Exchange Commission (SEC) continues to evaluate the approval of spot bitcoin exchange-traded funds, Receipts Depositary Corporation (RDC), supported by Franklin Templeton, is gearing up to introduce a bitcoin-based security product exempt from SEC registration. This product, known as depositary receipts, is exclusively available to qualified institutional buyers as per the U.S. Securities Act of 1933. RDC plans to issue the initial BTC +1.56% DRs to these investors in the near future.
Understanding Qualified Institutional Buyers
Qualified institutional buyers are entities with significant financial sophistication and substantial assets, such as banks and investment firms. Their financial prowess allows them to trade securities that may not be registered with the SEC. RDC, also backed by BTIG and Broadhaven Ventures, has stated that the BTC DRs will follow the same model as American Depositary Receipts (ADRs). These ADRs, which are shares of foreign stocks issued by banks, are traded on U.S. stock exchanges in U.S. dollars, thus simplifying the process for American investors to buy and sell shares of foreign companies.
The Functionality of BTC DRs
Broadridge Corporate Issuer Solutions will act as the SEC-registered transfer agent for RDC, with Anchorage Digital, a federally chartered digital asset bank, providing custody in a bankruptcy remote structure. This arrangement ensures that the DRs are fully backed by bitcoin held in custody and cannot be lent, re-hypothecated, or pledged. The BTC DRs will operate within U.S. regulated market infrastructure and will be cleared via The Depository Trust Company. This allows qualified investors to own bitcoin using the same technology, workflows, and counterparty relationships they use for traditional securities.
Future Plans for RDC
While BTC DRs are RDC’s initial offering, the company has indicated its ability to create clearinghouse-eligible securities for other alternative assets. The crypto industry has long sought a spot bitcoin ETF, with Franklin Templeton joining the race in September, alongside a total of 14 asset managers, including BlackRock, Fidelity, Valkyrie, and VanEck, all hoping to secure SEC approval.
As the crypto landscape continues to evolve, it’s essential to keep abreast of the latest developments. Platforms like cryptoview.io provide a comprehensive overview of the crypto market, making it easier for both seasoned investors and novices to navigate the complex world of cryptocurrencies.
This article is for informational purposes only and should not be considered as legal, tax, investment, financial, or other advice.
