A group of former Citigroup executives has introduced a new product called bitcoin depository receipts. They explained that this crypto product does not need to be registered with the U.S. Securities and Exchange Commission (SEC). The new offering aims to be a “complementary” product to spot bitcoin exchange-traded funds (ETFs) that the securities regulator is expected to approve early next week.

‘The First-Ever Bitcoin Depositary Receipt’ Launches

A startup called Receipts Depositary Corporation (RDC), formed by a group of former Citigroup executives, announced the launch of “the first-ever bitcoin depositary receipt (BTC DR)” on Thursday.

Bitcoin depositary receipts are similar to American Depositary Receipts (ADRs) for foreign stocks, RDC explained, adding that they operate within U.S.-regulated market infrastructure and are cleared through the Depository Trust Company (DTC). The announcement details:

RDC expects to issue the first BTC DRs in transactions exempt from registration under the Securities Act of 1933 to qualified institutional buyers (QIBs) in the coming weeks.

According to the company, RDC is backed by major institutions, including Franklin Templeton, BTIG, and Broadhaven Ventures. Moreover, Broadridge Corporate Issuer Solutions will serve as the transfer agent while Anchorage Digital Bank National Association will handle custody of bitcoin.

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

Ankit Mehta, RDC’s co-founder and chief executive, 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 exchange-traded funds (ETFs) that the SEC is expected to approve early next week. The executive described:

We are really 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.

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