Receipts Depositary Corporation (RDC) Announces First Bitcoin Depositary Receipts for Qualified Institutional Buyers
Receipts Depositary Corporation (RDC), the first depositary that aims to make it as easy for QIBs to own digital and alternative assets, has unveiled the inaugural Bitcoin depositary receipt (BTC DR), heralding a significant leap in offering institutional investors regulated access to digital assets.
The company is set to initiate the issuance of the first BTC DRs to Qualified Institutional Buyers (QIBs) in transactions exempt from registration under the Securities Act of 1933 in the imminent weeks.
This pioneering development opens the door for ongoing issuance of BTC DRs to QIBs.
The BTC DR, a DTC-eligible Bitcoin security, mirrors the construct of American Depositary Receipts (ADRs) and aligns with US-regulated market infrastructure, undergoing clearance through The Depository Trust Company (DTC). Each BTC DR has been assigned a unique CUSIP number and an ISIN, cementing its place within the established financial framework.
This milestone marks a historic precedent akin to the creation of the first ADR in 1927. Currently, ADRs boast a global network of over 6,500 financial institutions, including major multinational banks, brokers, and hedge funds. These institutional investors collectively manage an excess of $1 trillion in traditional DR securities, utilizing them seamlessly for investment, transactions, and settlement of foreign assets within the United States.
In line with this trajectory, BTC DRs empower QIBs to partake in Bitcoin ownership, leveraging the familiar technology, workflows, and counterparties utilized for traditional securities. This streamlined process facilitates standard transaction, custody, and settlement operations for QIBs, ensuring a smooth integration of Bitcoin into their investment portfolios.
According to Matthew Taback, Senior Market Maker at GTS, depositary receipts offer a straightforward resolution to intricate access barriers encountered by institutional investors.
RDC’s BTC DRs ensure direct ownership of Bitcoin through a meticulously regulated process involving Broadridge Corporate Issuer Solutions, LLC, serving as RDC’s SEC-registered transfer agent.
Anchorage Digital Bank National Association, the first and sole OCC-regulated and federally chartered digital asset bank, stands as the custodian in a bankruptcy remote structure. All Bitcoin associated with BTC DRs remains exclusively held by the custodian for the benefit of BTC DR holders.
Crucially, RDC’s model mandates a 100% backing of BTC DRs by Bitcoin in custody, explicitly barring lending, re-hypothecation, or pledging of these assets. This approach ensures that BTC DRs represent a direct claim on Bitcoin in custody while mitigating counterparty credit risk, bolstering asset protection.
While BTC DRs mark RDC’s debut offering, the corporation stands ready to create clearinghouse-eligible securities for other alternative assets. The founding team, comprising Ankit Mehta, Bryant Kim, and Ishaan Narain, boasts nearly a decade each at a prominent DR business. Their collective expertise positions RDC to leverage the existing securities ecosystem and evolve DR market structures.
Diogo Mónica, president and co-founder of Anchorage Digital, commended RDC’s expertise in depositary receipts and their visionary approach in adapting a well-established financial product to digital assets. He emphasized the secure storage of BTC through institutional-grade custody at Anchorage Digital Bank, underscoring their commitment to integrating BTC into the securities ecosystem.
With the launch of BTC DRs, RDC paves the way for institutional investors to seamlessly incorporate Bitcoin into their portfolios, ushering in a new era of regulated access to digital assets within the established financial framework.
