Startup Launches SEC-Exempt Bitcoin Securities: An Innovation by Citi Alumni

• Former Citigroup Executives to Introduce Bitcoin-Backed Securities
• RDC's Offering: BTC DRs
• About RDC and its Aim
• Bitcoin ETFs Vs. Depositary Receipts

Former Citigroup Executives to Introduce Bitcoin-Backed Securities

Former executives of Citigroup intend to launch bitcoin-backed securities in the market. According to their claim, these securities wouldn't need approval from the U.S. Securities and Exchange Commission (SEC), as Bloomberg reported last Thursday. The venture, known as Receipts Depositary Corp. (RDC), plans to offer depositary receipts similar to the American depositary receipts (ADRs). These ADRs stand for foreign stocks on U.S. equity exchanges.

RDC's Offering: BTC DRs

The so-called BTC DRs will be available to institutions and will be cleared through the Depository Trust Company (DTC). This was revealed in a company press release. RDC aims to provide bitcoin depositary receipts to investors, and these transactions will be exempt from registration under the Securities Act of 1933.

About RDC and its Aim

RDC's co-founder and CEO, Ankit Mehta, described the startup as a conversion tool for asset owners. These owners, who wish to convert their Bitcoin$42,260 -0.64% into DTC-eligible security, can enjoy direct ownership in U.S. clearances. The primary aim of RDC is to fulfill the institutional demand for Bitcoin investments. This demand might not be met by a spot exchange-traded fund (ETF). In the near future, It is anticipated that the SEC will approve the listing of a spot BTC ETF in the U.S.

Bitcoin ETFs Vs. Depositary Receipts

While shares in Bitcoin ETFs would be redeemed for cash, depositary receipts would offer direct ownership of Bitcoin, as highlighted by Mehta. This subtle difference might appeal to a new segment of investors, sparking a new wave of BTC trading. The market appears poised for this new development.

Edited by Jonathan Stoker