Summary:
Receipts Depositary Corp. is launching XRP-backed securities.
The offering is for qualified institutional buyers only.
Depositary receipts will provide direct ownership of XRP.
The securities will be cleared by the Depository Trust Company (DTC).
RDC already offers bitcoin (BTC) and ether (ETH) backed securities.
Receipts Depositary Corp. Expands Offerings to Include XRP-Backed Securities
Receipts Depositary Corp. (RDC), a startup founded by former Citigroup executives, is set to launch XRP-backed securities. This initiative aims to provide institutions with direct access to XRP securities through regulated U.S. market infrastructure.
The new product will feature depositary receipts akin to American depositary receipts (ADRs), which represent foreign stocks in U.S. equity exchanges. However, this offering is exclusively for qualified institutional buyers and will be conducted through transactions that are exempt from registration under the Securities Act of 1933, meaning it won’t require SEC approval.
The Depository Trust Company (DTC) will clear these new securities, similar to RDC's existing offerings of bitcoin (BTC) and ether (ETH) backed securities. In a January 2024 press release, RDC's founder and CEO, Ankit Mehta, highlighted that depositary receipts provide significant benefits, including direct ownership of the underlying asset and seamless integration into institutional products.
As the native cryptocurrency of the Ripple network, XRP has experienced notable growth over the past year, prompting various companies to explore ways to introduce it to institutional investors. Notably, several asset managers and ETF providers have submitted applications for ETFs tracking the price of XRP.
It’s important to note that unlike an ETF, which would redeem shares for cash, depositary receipts will offer direct ownership of the cryptocurrency, solidifying their appeal to investors looking for tangible asset ownership.
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