A new opportunity for qualified investors to gain exposure to XRP without directly purchasing the cryptocurrency may soon be available. Through a partnership between the Receipts Depositary Corporation (RDC) and Digital Wealth Partners (DWP), accredited investors will be able to buy XRP Depository Receipts (DRs), a regulated financial product that represents ownership of actual XRP held by a regulated custodian.
This move allows investors to access XRP in a compliant and secure manner, sidestepping the need to directly acquire the cryptocurrency from exchanges. According to Eleanor Terrett, an industry insider, these XRP DRs will soon be purchasable through the Receipts Depositary Corporation and DWP Advisors.
How XRP Depository Receipts Work
The concept of XRP DRs mirrors that of American Depositary Receipts (ADRs), a financial instrument commonly used to represent shares in foreign companies that are not listed on U.S. stock exchanges. In the case of XRP, these receipts will represent ownership of the cryptocurrency, but with the added benefit of being backed by actual XRP held in custody by Anchorage, a federally chartered bank regulated by the U.S. Office of the Comptroller of the Currency (OCC).
RDC, a start-up founded by former Citigroup executives, is spearheading this effort to offer XRP-backed securities to institutional investors within a U.S.-regulated market. Unlike XRP-based exchange-traded funds (ETFs) and trusts, which are still awaiting approval from the U.S. Securities and Exchange Commission (SEC), XRP DRs are already operating within an established regulatory framework, making them available to accredited investors.
A Seamless Integration Into Institutional Markets
The XRP DR program is also eligible for the Depository Trust & Clearing Corporation (DTC) system, allowing for electronic settlement and integration with institutional trading platforms. This means that XRP can now be handled by banks and brokers just like any other traditional security.
Moreover, the XRP DRs are convertible in-kind, meaning investors can redeem their DRs for actual XRP where regulations permit. This capability offers a high degree of flexibility and transparency in the management of crypto assets.
The Benefits for Institutional Investors
By leveraging existing market infrastructure, XRP DRs make investing in cryptocurrencies as straightforward as trading stocks. The introduction of these receipts opens up a new avenue for institutional investors who may have previously been hesitant to engage directly with digital assets. Furthermore, the use of depository receipts is a long-established method for allowing investors to gain exposure to assets that are not typically accessible in U.S. markets. The move to apply this system to cryptocurrencies is seen as a significant step in bridging traditional finance with the digital asset ecosystem.
With the growing institutional interest in cryptocurrencies, the availability of XRP DRs marks a notable development in the evolving landscape of crypto investments.
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