Original author: Jamie Crawley, Coindesk

Original compilation: Jordan, PANews

As speculation reaches fever pitch over the imminent approval or rejection of a spot Bitcoin ETF, a group of former Citigroup executives are trying to find a different approach aimed at giving investors more options.

On the evening of January 4, a company called Receipts Depositary Corporation (RDC) surfaced. The three co-founders of the company, Ankit Mehta, Bryant Kim, and Ishaan Narain, all worked in the Citi Depositary Receipts team and were very familiar with it. The financial framework of depositary receipts has therefore gained favor and support from institutions such as Franklin Templeton, BTIG and Broadhaven Ventures.

What are American Depositary Receipts? What are Bitcoin Depository Receipts?

According to RDC, the company will offer Bitcoin depositary receipts similar to American Depository Receipts (ARDs) and will not require SEC approval.

So the first question is, what are American Depositary Receipts?

Depository Receipts (DRs) are securities issued by a depositary that represent ownership of an underlying asset and facilitate investors to convert, hold and transfer the underlying asset, such as foreign equity or bonds. According to the relevant securities laws of the United States, companies listed in the United States must be registered in the United States. An American depositary receipt is a transferable certificate issued by a U.S. commercial bank to assist the trading of foreign securities in the United States. It usually represents a non-U.S. company that can be made public. Trading stocks and bonds. American depositary receipts are traded in the U.S. market. The trading procedures are the same as ordinary U.S. stocks. They are issued by U.S. banks. Each share contains a number of shares of a company in a country other than the U.S. entrusted to a foreign custodian. It can be traded on the U.S. stock exchange market or The over-the-counter market allows free trading, allowing non-U.S. companies to access the U.S. securities market.

After understanding the concept of American depositary receipts, let’s take a look at Bitcoin depositary receipts.

Bitcoin Depositary Receipts are essentially a Bitcoin investment tool that is fully interchangeable with the underlying Bitcoins held by a designated custodian. The Bitcoin Depository Receipts launched by RDC this time represent direct ownership of the underlying Bitcoins, and Not shares of the Fund. Simply put, Bitcoin Depository Receipts allow U.S. investors to invest in Bitcoin the same way they invest in overseas companies without running afoul of the Securities Act.

Bitcoin Depository Receipts follow the same structure as American Depositary Receipts, which like ADRs operate within a U.S. regulated market infrastructure and are cleared by the Depository Trust Company (DTC), The current operating infrastructure of RDC includes: Broadridge Corporate Issuer Solutions and Anchorage Digital Bank National Association. The former will act as a transfer agent, and the latter is responsible for the underlying Bitcoin custody. It is reported that RDC’s Bitcoin depositary receipts have obtained U.S. Securities Co., Ltd. Number (CUSIP) number and International Securities Identification Number (ISIN).

6 Questions to Learn More About RDC Bitcoin Depositary Receipts

1. Does the RDC that issues Bitcoin Depositary Receipts own Bitcoins in custody?

No, as a custodian, RDC does not own the underlying Bitcoins in custody under the terms of the Bitcoin Depository Receipt facility, the Bitcoins in custody are owned by the Bitcoin Depository Receipt holders.

2. Do Bitcoin Depositary Receipts track the value of assets?

Bitcoin Depositary Receipts are fully fungible with the underlying Bitcoin and are designed to track the asset value of the underlying Bitcoin.

3. Can BTC be lent under managed Bitcoin Depositary Receipts?

No, custodial Bitcoins cannot be loaned out and must be 100% backed by every Bitcoin Depositary Receipt in circulation.

4. Are the Bitcoins held in custody available for creditors to claim?

No, the custody structure of Bitcoin Depositary Receipts means that the Bitcoins in custody are segregated from the asset itself. The underlying Bitcoins are owned by Bitcoin Depositary Receipt holders.

5. Who can issue and cancel Bitcoin depositary receipts?

Qualified Institutional Buyers (QIBs) can issue and cancel Bitcoin Depositary Receipts.

6. What other assets does RDC’s custody platform support?

RDC’s mission is to extend traditional depositary receipt structures to digital and alternative assets, and while Bitcoin Depository Receipts are the only product currently offered, some of the most widely used digital and alternative assets are actively being explored subject to a comprehensive due diligence process product, the process takes into account the needs of institutional investors, the ability of custodians to support these assets and the needs of the majority, as well as regulators’ views of the underlying asset, Bitcoin.

Summary: What are the advantages of introducing the concept of “depositary receipts” into Bitcoin?

Depository receipts can be cleared and settled through the Depository Trust Company, allowing investors to trade within its traditional clearing system. Unlike most other access products, depository receipts provide direct ownership of the underlying assets, and the custodian provides high-touch, value-added operational services to depository receipt holders.

What’s more, this model is exempt from the registration requirements of the U.S. Securities Act, meaning Bitcoin depositary receipt custodians can “bypass” the U.S. Securities and Exchange Commission—at least for now. According to RDC, the Bitcoin depositary receipts they launched are positioned to complement the spot Bitcoin ETF. From this perspective, in case the spot Bitcoin ETF is not approved, the Bitcoin depositary receipts may also be a good option. choose.