Crypto Depository Receipts: New Take on an Old Solution Can Drastically Change Equity Ownership & Issuance
A CDR is a new idea in the crypto space with the potential to upend global financial markets and dramatically reduce the costs incurred in the existing system of transfers and settlements.
A CDR is a new idea in the crypto space with the potential to upend global financial markets and dramatically reduce the costs incurred in the existing system of transfers and settlements.
Equity and debt markets are unquestionably among the most popular and long-established markets worldwide. However, they still suffer from a number of significant drawbacks and inefficiencies, including high transaction costs (brokerage fees or expenses related to liquidity) and administrative expenses, slow settlement through the process of traditional equity ownership (from exchange delays to registration), and lots of cumbersome paperwork.
A familiar solution with a new twist
To address these challenges, a team of crypto evangelists and career bankers, led by CDRX Chief Executive Officer, David Ward, have come up with an innovative idea, leveraging blockchain technology to issue Crypto Depository Receipts (CDRs), which will fundamentally change equity ownership.
CDRX is ahead of the curve
Importantly, this solution will be applicable not only to existing equities but it will also allow companies to issue new equities directly as tokens, a procedure CDRX defines as “native issuance.”
Taking the best of both worlds
Besides, investors and issuers will be exempt from burdensome broker execution costs and fees since no intermediaries will be required to perform and settle transactions. Finally, CDRs will allow fractional ownership of many assets that would otherwise be too expensive for small investors.
“In creating our CDR product, we have sat with investors, issuers, and regulators to address their frustrations with traditional markets. We are at the forefront of these developments, and unlike other securitized token models, direct participation from issuers is not required. Our approach leverages a proven route to securitization which, following regulatory approval, allows immediate conversion of the entire market,” CDRX CEO, David Ward said.
A dedicated exchange for crypto derivatives
Apart from its CDR product, the global team of experts at CDRX is in the process of launching an exchange for listing and trading securitized and non-securitized crypto-instruments. The plan is to have the platform online in closed beta for the fourth quarter of 2018.
CDRX plans to start with a non-securitized token-to-token trading platform, which is a reputable model that does not require regulatory approval. Further down the line, the company will expand it to include securitized tokens and token-to-fiat currencies. Overall, CDRX aims to create a marketplace where coins, tokens, and CDRs can be freely traded 24/7 and provide its users with global liquidity and high speed.
Regulation to be embraced, not avoided
Last but not the least, CDRX places particular emphasis on regulatory compliance. To achieve this, the company is already in discussions with well-regarded regulators worldwide, to be fully prepared for its regulatory obligations. This is especially important given the CDR product and its securitised nature. It is CDRX’s hope that with early compliance, a deeper partnership can be forged with the regulators - it aims to be the bellwether in this respect.
CDRX is currently open to private investors, while a public sale will be announced in the future. You can learn more about the project on theirofficial websiteand join theirTelegramchannel for regular updates.