Receipts Depositary Corp. (RDC) Plans Launch of XRP-Backed Securities
Receipts Depositary Corp. (RDC), an innovative start-up established by a team of former executives from Citigroup, is gearing up to introduce XRP-backed securities. This strategic move aims to provide institutional investors with access to XRP (XRP) securities through a U.S.-regulated market framework.
According to sources familiar with the situation, the company intends to offer depositary receipts that function similarly to American depositary receipts (ADRs). These receipts represent foreign stocks on U.S. equity exchanges, thus facilitating easier access to international assets.
The upcoming product will be available exclusively to qualified institutional buyers, facilitated through transactions exempt from registration under the Securities Act of 1933. This means that RDC’s offerings will not require approval from the Securities and Exchange Commission (SEC), streamlining the process for investors.
As reported by Fox Business earlier this Friday, the XRP-backed securities will be cleared by the Depository Trust Company (DTC). This approach is consistent with the existing offerings of RDC, which already includes securities backed by bitcoin (BTC) and ether (ETH).
In a press release issued in January 2024, RDC’s founder and CEO, Ankit Mehta, emphasized the advantages of utilizing depositary receipts. He stated that their “tried and true structure” provides direct ownership of the underlying asset, making it easier to integrate into institutional products.
As the native cryptocurrency of the Ripple network, XRP has experienced significant growth over the past year, prompting several companies to target institutional investors. Numerous asset managers and exchange-traded fund (ETF) providers have recently submitted applications for ETFs that track the price of XRP.
It is essential to note the distinction between an ETF and depositary receipts: while shares in a potential XRP ETF would be redeemable for cash, depositary receipts offer investors direct ownership of the cryptocurrency itself. This feature could attract a broader range of institutional investors looking for tangible asset exposure.
