Citi Alumni Reveal Bitcoin Depository Reserves, Carrying Out a Rollout Without the Need for SEC Approval

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Last Updated on January 4, 2024 by Bitfinsider

Following the recent announcement by a group of former Citigroup Inc. officials of their intentions to introduce Bitcoin-backed securities free from the US SEC’s regulations, the cryptocurrency world saw a deluge of speculative excitement. As the announcement surfaced in the market amid the intense expectation of a Bitcoin Spot ETF, it quickly attracted the attention of cryptocurrency market aficionados worldwide, enabling the debut.

Notably, there is a strange resemblance between the new securities—Bitcoin depository receipts—and American depositary receipts that represent foreign stocks. In addition, it appears that the startup Receipts Depositary Corporation (RDC) is aiming to release the first Bitcoin depositary receipts for eligible international institutional investors, relieving itself of Securities Act of 1933 registration obligations.

The official statement states that the goal of the BTC DRs is to provide institutions with access to Bitcoin securities through US-regulated market infrastructure, after which the Depository Trust Co. will sanction the transaction. Furthermore, according to Ankita Mehta, a former executive at Citigroup and co-founder of RDC, the main function at this point is to act as a conversion tool for different asset owners, such as hedge funds, family offices, or major institutional investors. After that, convert their Bitcoin holdings into securities that qualify for DTC, allowing them to obtain direct ownership in US clearances.

Anchorage Digital Bank National Association will also serve as the managerial custody for the underlying BTC in RDC’s offering, while Broadridge Corporate Solutions is scheduled to function as the transfer agent.

Interestingly, investors including Franklin Templeton, BTIG, and Broadhaven Ventures gave RDC a jack-up, and it now intends to provide a supplementary product to Bitcoin ETFs. In addition, the RDC’s approval provides accredited institutions with direct ownership of Bitcoin, setting itself apart from ETFs redeemed for cash in the midst of growing worries around the approval of spot Bitcoin ETFs.

The price of Bitcoin fell 5.23% in the last day as of this writing, and it is now trading at $42,955.06. Moreover, a weekly decline of 0.51% accompanied this decline even more.

Remarkably, the market capitalization increased by 5.20% to $841,50 billion. Nonetheless, there was a massive 59.78% increase in the 24-hour trading volume, which supported more assumptions about the coin.

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