Receipts Depositary Corp. (RDC), established by previous leaders from Citigroup, is on the verge of introducing XRP-backed securities specifically tailored for institutional clients. The firm is committed to creating innovative financial products compliant with U.S. regulations.
What Are These New Securities?
RDC’s new offerings are modeled after American depositary receipts, which represent foreign securities. These XRP-backed securities will be accessible to qualified institutional buyers, leveraging exemptions from the Securities Act of 1933. This enables RDC to bypass the lengthy approval process typically required by the U.S. Securities and Exchange Commission.
How Will These Securities Operate?
The clearing process for these XRP securities will mirror that of existing products linked to Bitcoin and Ether, facilitated by the Depository Trust Company (DTC). This innovative move comes at a time when interest in XRP is surging among asset managers and ETF providers in the financial landscape.
Ankit Mehta, RDC’s CEO, emphasized the advantages of these depositary receipts in a January 2024 press release.
“These receipts provide a strong framework, direct ownership of the underlying asset, and straightforward access to institutional products,” Mehta stated.
The initiative aims to furnish a new pathway for investors, allowing them to directly own XRP instead of relying on cash settlements, which is commonly seen in traditional products. This may signify a pivotal shift within the market.
- Provides direct ownership for investors.
- Aligns with regulatory frameworks to facilitate adoption.
- Offers a new investment strategy focused on digital assets.
The introduction of these XRP-backed securities is being closely evaluated by market participants, as it may significantly influence investment approaches rooted in digital assets, contrasting sharply with existing financial products.
