New Venture by Former Citigroup Executives to Introduce XRP-Backed Securities

Overview

Receipts Depositary Corp. (RDC), founded by a group of former Citigroup executives, is set to launch XRP-backed securities. This move aims to provide institutions access to XRP securities through regulated market structures in the U.S.

Key Points

RDC already provides securities backed by bitcoin and ether.
The new offering will cater exclusively to qualified institutional buyers.

The company will issue depositary receipts akin to American depositary receipts (ADRs), representing foreign stocks traded on U.S. exchanges. These offerings will be executed in transactions exempt from registration under the Securities Act of 1933, thus bypassing the need for approval from the Securities and Exchange Commission (SEC).

In a press release from January 2024, CEO Ankit Mehta highlighted the advantages of utilizing depositary receipts, stating, “They provide direct ownership of the underlying asset and easy inclusion in institutional products.”

With significant interest in XRP, the native cryptocurrency of the Ripple network, several asset managers have been pursuing ETFs linked to XRP’s price. Unlike an ETF, depositary receipts grant direct ownership of the cryptocurrency rather than cash redemption.