A group of former Citigroup executives plans to offer bitcoin-backed securities they say don't need to be approved by the U.S. Securities and Exchange Commission (SEC), Bloomberg reported on Thursday.
Receipts Depositary Corp. (RDC) will offer depositary receipts similar to the American depositary receipts (ADRs) that represent foreign stocks on U.S. equity exchanges. The "BTC DRs" will be offered to institutions and cleared through the Depository Trust Company (DTC), according to the report, which cited a company release.
RDC will offer bitcoin depositary receipts to investors in transactions exempt from registration under the Securities Act of 1933.
RDC co-founder and CEO Ankit Mehta described the startup as "a conversion tool for asset owners ... that want to take their bitcoin and convert it into a DTC-eligible security and enjoy direct ownership in the U.S. clearances.”
RDC aims to address the institutional desire for bitcion investments that may not be satisfied by a spot exchange-traded fund (ETF). The SEC is expected to approve the listing of a spot BTC ETF in the U.S. in the very near future.
Whereas shares in bitcoin ETFs would be redeemed for cash, depositary receipts would offer direct ownership of bitcoin, Mehta said.
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