Franklin Templeton-backed Receipts Depositary Corporation intends to introduce a bitcoin-based security product exempt from SEC registration amid rumors that the Securities and Exchange Commission may approve spot bitcoin exchange-traded funds in the US.
According to the company, the U.S. Securities Act of 1933 exempts qualified institutional buyers from purchasing depositary receipts. In the upcoming weeks, it plans to issue the first Bitcoin DRs to these investors.
Financially sophisticated organizations with substantial assets, such as banks and investment firms, are qualified institutional buyers. This enables them to trade securities that might not be SEC-registered.
The BTC DRs are constructed similarly to American Depositary Receipts, which are shares of foreign stocks issued by banks, according to RDC, which also has support from BTIG and Broadhaven Ventures.
Because ADRs are traded in US dollars on US stock exchanges, American investors can purchase and sell shares of foreign companies more easily.
Ankit Mehta, co-founder and CEO of RDC, stated, “We are thrilled to give qualified institutional buyers the safe, regulated access to digital assets they have been waiting for via BTC DRs.”
He added, “There are many benefits to using depositary receipts, such as their tried and true structure, providing direct ownership of the underlying asset and easy inclusion in institutional products.
BTC DRs are universally fungible as QIBs can convert their bitcoin holdings into DRs and vice versa.”
Also Read: Franklin Templeton Joins Race for Bitcoin Fund Approval
