The Depository Trust and Clearing Corporation (DTCC) has announced that from the 30th of April 202, they would not permit exchange-traded funds (ETFs) with Bitcoin or cryptocurrency exposure to be used as collateral.
DTCC is a company that provides clearing and settlement services across financial markets and every year during its renewal of credit facilities it makes changes to remove all collateral value given to ETFs that have Bitcoin or other cryptocurrencies as underlying assets.
The notice stated that as from April 30th, 2024 onwards, no collateral will be allocated by DTCC against any ETF having exposure towards Bitcoins or any other type of cryptocurrencies thereby reducing their assigned collateral value by a hundred percent
However, K.O. Kryptowaluty has explained that this rule applies exclusively to inter-entity settlements within the DTCC’s line of credit system; thus it does not affect brokerage firms’ use crypto ETFs as collaterals in different lending activities subject only to individual risk tolerance policies.
This year alone Goldman Sachs saw renewed interest in the crypto market among clients following the introduction of spot Bitcoin ETFs in US earlier this year despite DTCC distancing itself from such investments.
Also Read: Nigerian Govt Denies Ordering Freeze on Crypto Accounts
