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Crypto’s institutional era isn’t arriving all at once — it’s advancing one piece of market structure at a time. Custody, compliance, ETFs, and treasury management have all matured dramatically, yet one fundamental challenge persists: there’s still no seamless way for traditional institutions to treat crypto tokens like any other asset in their brokerage accounts. That gap has drawn the attention of three former ADR specialists who spent years building the systems that move trillions of dollars in foreign equities around the world. Their new company, Receipts Depositary Corporation (RDC), is betting that the same mechanism used for global stocks can unlock a new chapter for digital assets. In this interview, co-founder Ishaan Narain breaks down why Depositary Receipts may become one of the most important bridges between crypto and mainstream finance.
Hadley: Maybe let’s start at the top, what is a Depositary Receipt?
Ishaan: Depositary Receipt (DR) is a security that represents direct ownership of an underlying asset held with a custodian.
DRs have a long history. They were invented in 1927 to solve a very practical problem: U.S. investors wanted to own foreign stocks like UK or European equities, but they didn’t want to deal with foreign custody accounts, local settlement systems, time zones, FX or unfamiliar legal regimes. Instead, a depositary would hold the foreign shares in custody on behalf of DR holders and issue a U.S. security[1] that:
Over the last century, DRs have become the “tried and true” cross-border access tool: more than 6,500 institutions hold over $1 trillion in ADRs and GDRs[2] from issuers like Alibaba, Nestlé and Samsung. DRs have also evolved to bridge commodities and other asset classes with the traditional securities market.
Hadley: What is Receipts Depositary Corporation, and what problem are you trying to solve?
Ishaan: RDC is the first independent, non-bank depositary built specifically to apply the DR structure to crypto and other alternative assets. The problem we’re solving is fairly straightforward. Institutions increasingly want direct ownership of crypto tokens, not just exposure. In many cases, they want to use their tokens in their traditional brokerage or wealth management accounts for custody and monetization in a risk-mitigated manner. However, crypto lacks the familiar plumbing of traditional markets – no CUSIPs, no DTC settlement, complex wallet infrastructure and significant operational and regulatory friction. This makes it very difficult to support the asset class through traditional custody, risk, accounting, compliance and technology frameworks.
RDC bridges the gap. We issue DTC-eligible crypto DRs that have CUSIPs, ISINs and tickers. The DRs are in-kind convertible with the underlying tokens, so crypto holders can seamlessly move between the token form and the security form while retaining full ownership. To facilitate this, RDC connects with regulated service providers, including an OCC-chartered digital asset custodian, an SEC-registered transfer agent and DTC, where the DRs are custodied.
Hadley: Most investors associate DRs with emerging-market equities, not crypto. How do DRs actually work in this new context?
Mechanically, crypto DRs work the same way as traditional ADRs. The only difference is the underlying asset.
The process of creating a crypto DR is also very similar. A qualifying crypto owner deposits the token into the DR custodian’s wallet, then instructs RDC to issue DRs to their brokerage account in DTC. When the DR holder wants to go back on-chain, they tell their broker to cancel the DR and instruct RDC to release the token back to their wallet. Just like traditional ADRs, crypto DRs are securities that can be held in traditional brokerage accounts and utilized with traditional capital markets.
Ishaan: What inspired you and your co-founders — Ankit Mehta and Bryant Kim — to build this company?
Before starting RDC, my co-founders and I spent close to a decade at a bulge bracket bank, where we ran the ADR product management and capital markets solutions business. We worked on a variety of international IPOs, including some of the largest ADR IPOs in history. That gave us a front-row seat to how powerful the DR model is for solving cross-border ownership, transferability, regulatory and infrastructure challenges.
We observed that while DRs had historically been used almost exclusively for foreign equities and debt, they addressed the same underlying situation traditional institutions now face with crypto. For these firms, crypto markets really are like a foreign market, with different regulations and infrastructure.
So, we launched RDC with the DR playbook we knew incredibly well and applied it to Bitcoin, Ethereum and other crypto tokens, with the vision to extend it to other alternative assets over time.
Hadley: Who do you see as your primary users or partners?
A growing range of institutions are turning to depositary-receipt structures as a way to integrate crypto assets into traditional securities workflows without taking on the operational burden of holding tokens directly.
On the buy side, hedge funds, macro funds, crypto-native managers, family offices, and RIAs increasingly want the ability to custody and deploy tokens using the same prime brokerage relationships they rely on for equities and derivatives — whether to access margin, unlock financing, or simply consolidate everything within a single operational stack. Token foundations are also beginning to see DRs as a path to list their assets in registered public offerings on U.S. exchanges, expanding distribution to mainstream investors.
On the intermediary side, prime brokers, banks, broker-dealers, and retail wealth platforms are embracing DRs because they can treat them like any other DTC-eligible security, enabling collateralization, margin lending, trading, and inventory management without touching crypto directly. And across the structured-product universe, ’40 Act and ’33 Act funds, digital asset treasury companies, SMAs, and model portfolio platforms are using DRs to hold spot tokens in a compliant wrapper that supports staking, in-kind distributions, collateralization, and other functions that would otherwise be difficult or impossible under existing regulations. Together, these segments illustrate a broader shift: traditional markets increasingly want the economic exposure and utility of crypto tokens, but through infrastructure they already trust.
Ishaan: What makes DRs different from ETFs or DATs?
ETFs and DATs are passive exposure products that do a great job giving investors exposure to Bitcoin or other tokens in a familiar securities wrapper – but there are structural differences between these products and DRs. They ultimately serve different needs and are often complementary.
ETFs retain ownership and control of the underlying assets and track an index at net asset value (NAV), creating inherent tracking error against the underlying token. They also create expenses for investors by selling the underlying tokens, which results in less underlying token per share over time. Finally, they limit creation and redemption activity primarily to APs, and this activity settles on a T+1 basis.
DATs do not operate like funds, so there is no creation or redemption mechanism, which can cause value deviations and tracking error against the underlying token. The issuer also has the right to issue new shares and can dilute token ownership for investors.
A DR is not a fund. It’s a security that represents ownership rights to a specific underlying asset sitting in custody. Any qualifying investor (not just APs) can create or redeem DRs in-kind by depositing or withdrawing the underlying tokens. All DR fees are charged as separate cash debits. They do not require selling any underlying tokens, because DRs directly represent the token’s units and don’t rely on index tracking or NAV calculations.
As a result of these structural features, asset managers can conveniently hold DRs in their funds, ETFs or structured products, while DATs can use them to mobilize their token holdings in the securities capital markets.
Hadley: What stage are you at now — live products, pilots, or still in build mode?
Ishaan: We’re live with DRs on Bitcoin, Ethereum, Solana and XRP and can set up DRs on other crypto tokens based on investor demand. Institutional token owners (hedge funds, prop trading desks, RIAs, etc.) are already using these DRs to convert their tokens into securities and vice versa.
The DRs have been approved for custody and, more recently, margin relief by prime brokers. In addition, the DRs are increasingly included in ’40 Act filings as a tool for direct exposure to crypto.
Hadley: How do you see the future of DRs and digital assets converging over the next five years?
Ishaan: We see a few big themes emerging as regulatory clarity improves and more traditional institutions feel comfortable entering the ecosystem. First, we expect DRs to develop as the “direct ownership rail” alongside the proliferation of ’33 Act ETPs, index products, and staking-adjacent strategies. As generic listing standards broaden, those products will help normalize crypto for a very wide audience, and DRs will be the instrument they can use to hold the underlying assets directly and efficiently.
Second, we’re seeing strong interest in ’40 Act crypto strategies. Even the more cautious asset managers are now preparing to execute various strategies through ’40 Act funds, and DRs are well-positioned to become the preferred way for them to gain that exposure. Third, a growing number of regulated broker-dealers, banks, and wealth managers want to service their clients’ crypto needs, but they want to do so within the same workflows, guardrails, and supervisory processes they use for traditional securities. DRs fit neatly into that model.
And finally, we think public-market activity will continue to grow. DATs have already shown that public-market investors are eager for direct exposure to the crypto token ecosystem, and we expect that momentum to continue. Beyond DATs themselves, we anticipate new products emerging that use DR-style wrappers to bring token exposure deeper into the public markets.
Ishaan: We have a few concrete priorities on the roadmap. First, we’re focused on scaling our existing DR programs. That means deepening adoption across ETF issuers, DATs, hedge funds, family offices, prime brokers, and wealth managers, while continuing to refine our integrations with traditional platforms so that DRs feel even more “plug-and-play” for institutional operations.
Second, we’re preparing to launch new crypto DRs where there’s clear institutional demand, strong custodial support, and the right regulatory comfort. Third, we’re leaning deeper into ETF and ’40 Act integrations — working with sponsors who want the most direct and cost-efficient way to hold crypto, and helping conservative firms get ready for a post-Clarity Act environment where they can finally execute the strategies they’ve been modeling for years.
Fourth, we’re developing tokenized ADRs. These will preserve the legal structure of DRs but enable programmatic workflows — from collateralization to settlement to cross-venue transfers — which really starts to show what a modernized DR infrastructure can do. And finally, we’re exploring how this model extends to alternative and real-world assets beyond crypto, especially in categories where the DR structure can unlock liquidity, improve investor protection, or simplify access for institutions.
[1] American Depositary Receipts
[2] Global Depositary Receipts, which are foreign securities issued outside of the US that represent direct ownership of a foreign shares trading in other markets
