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Depositary Receipts: A Critical Direct Bridge Between Crypto and TradFi

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Digital assets have grown into a multi-trillion-dollar market, yet they remain largely disconnected from traditional finance. Institutional investors increasingly want to own and monetize digital assets, but most banks, broker-dealers and asset managers operate on infrastructure designed for stocks and bonds — not blockchain-based assets. While spot crypto ETFs are an important step toward integration, they only enable passive exposure to the asset class. For digital assets to fully mature, they need a mechanism that bridges them with the entirety of the existing capital markets infrastructure in a familiar, regulated way.

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Enter American Depositary Receipts (ADRs). For nearly a century, receipts have served as that bridge for international stocks, debt and commodities, enabling U.S. investors to own foreign assets with the same ease as domestic securities. The first ADR—issued in 1927—set the stage for a system that today facilitates trillions in global investment. ADRs work because they provide fungibility, economic and governance rights and U.S. regulatory oversight, all while ensuring efficient settlement through the Depository Trust & Clearing Corporation (DTCC). They enhance local liquidity and market access, as seen in Chinese companies listing on the London Stock Exchange and U.S. stocks trading in Brazil.

Crypto as the modern foreign market

Crypto-focused ADRs will play a similar role for digital assets. Just like foreign markets, crypto operates outside the traditional U.S. capital markets, making it difficult for most institutions to engage without specialized infrastructure. ADRs provide a regulated, accessible and familiar framework that enables:

Seamless access – Crypto can be included in funds and held at existing banks and brokerage accounts, unlocking traditional capital markets utility.

Efficient two-way convertibility – By not being limited to authorized intermediaries, ADRs provide asset owners the choice to convert underlying crypto and ADRs in-kind.

Cost efficiency – ADR conversions are simple, same-day processes that do not require a NAV calculation. Fees are never deducted by selling the underlying crypto.

Institutional workflow compatibility – Settlement through DTCC via unique identifiers like CUSIP and ISIN ensure seamless alignment with existing workflows.

TradFi demands crypto

Institutional demand for digital assets is surging, but most traditional market participants are still tied to DTCC rails and are not set up to directly interact with crypto. ADRs meet these firms where they are today, while also addressing key regulatory, compliance and operational hurdles:

Regulation – ADRs are SEC-regulated securities with CUSIPs, ISINs and tickers, ensuring investor protection.

Compliance – Only regulated entities (broker-dealers, banks, etc.) custody and service ADRs, maintaining high compliance standards.

Operations – ADRs settle through traditional stock clearing systems, just like any other security.

Unlocking market expansion

By linking the $3 trillion crypto market with the $87 trillion securities market in DTCC, ADRs can drive institutional adoption and unlock new opportunities in the traditional markets, including the following:

24/7 trading – Crypto markets never close, but traditional securities do. ADRs enable round-the-clock trading of traditional securities, mitigating overnight and weekend risk. Since the launch of spot bitcoin ETFs in early 2024, BTC has experienced 10% swings on two separate weekends —moves that institutional investors could not fully capitalize on.

Yield, lending & settlement – ADRs could be used for margin trading, settlement of spot crypto and futures trading, collateralized lending and structured products. Due to their unique ability to link ADR and spot crypto liquidity, ADRs are an ideal instrument to institutionalize these use cases.

Custody choice – Investors can conveniently hold assets on-chain or in traditional brokerage accounts.

Fund inclusion – Due to their security status, ADRs enable crypto ownership in ETFs and institutional portfolios.

Conclusion: a foundation for institutional growth

ADRs revolutionized global investing by making foreign stocks seamlessly available to U.S. investors. Now, there is a unique opportunity to continue this legacy of enabling market access. By providing a regulated, efficient and familiar bridge for institutions to engage with digital assets, ADRs could be the key to unlocking crypto’s next stage of growth and ultimately bring new institutional capital on-chain.

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Whales Buy the Bitcoin Dip: First Meaningful Accumulation in 8 Months

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Prices remain under pressure and sentiment is so weak one would think it’s 2022 all over again, but for the first time in nearly a year, bitcoin (BTC) whales are buying.

Following months of distribution as bitcoin surged to a record high above $109,000, so-called whales — wallets holding 10,000 BTC or more — are meaningfully accumulating as prices dip to just above $80,000, according to Glassnode data.

The last time whales were buying so aggressively was in August 2024 with bitcoin in the $50,000-$60,000 range as the yen carry trade was unwinding.

Often considered “smart money,” whales tend to buy during deep corrections and sell into strength — a pattern that has played out consistently over the past eight months.

Despite this renewed whale activity, broader market behavior remains bearish, with bitcoin currently down 25% from its all-time high. Glassnode’s Accumulation Trend Score, which tracks the behavior of different wallet cohorts over a 15-day window, shows that most other investor groups are still in distribution mode.

A score closer to 1 signals accumulation, while a score near 0 indicates distribution. With an overall market score of just 0.15, selling pressure remains dominant. This suggests that while whales are starting to buy the dip, broader market sentiment continues to lean bearish, potentially putting further downward pressure on price—at least in the short term.

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Brazil’s Largest Bank Itaú Unibanco Mulls its Own Stablecoin

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Itaú Unibanco, Brazil’s largest bank by assets, is exploring whether to issue its own stablecoin as regulatory discussions evolve and U.S. financial institutions slowly move into the sector.

The decision could hinge on how American institutions fare with their stablecoin rollouts, said Guto Antunes, head of digital assets at Itaú. At an industry event in São Paulo, Antunes cited the growing momentum behind blockchain-based settlement systems.

“Itaú has always had stablecoins on its radar. We cannot ignore the strength that blockchain has to settle transactions atomically,” local media quoted him saying. Stablecoins, for now, remain a “topic on the agenda.”

The renewed interest in stablecoins comes on the heels of a political shift in the U.S., where lawmakers rejected a central bank digital currency (CBDC) in favor of encouraging private stablecoin alternatives to preserve the dollar’s dominance.

In Brazil, regulators are conducting a public consultation—Consulta Pública No. 111—focused on how stablecoins might fit into the existing financial system. Antunes said the bank is waiting to see what rules the central bank sets before advancing any internal project.

Antunes also raised concerns about a proposed ban on self-custody in Brazil’s draft stablecoin rules. Brazil, it’s worth noting, has barred major pension funds from investing in cryptocurrencies.

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0xbow’s Ethereum Privacy Pools Surpass 200 Deposits as User Interest Grows

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«Tornado [Cash] is dead, but privacy won’t die,» an ether enthusiast said on X after Oxbow’s Ethereum privacy tools went live on April 1 to facilitate on-chain privacy while dissociating from illicit funds.

The sentiment is echoed by the early uptake for the privacy pools, which have processed 238 user deposit transactions, totaling 67.49 ETH in the first three days. The new tool has received a thumbs-up from Ethereum founder Vitalik Buterin, who was one of the first to deposit ETH.

These privacy pools leverage zero-knowledge proofs and commitment schemes to facilitate ether deposits and subsequent withdrawals, in part or whole, while breaking the link between deposits and withdrawal addresses. Think of it like having a specialized bank account to send money while hiding your identity or how much money you have.

The architecture comprises the contract layer for managing assets, the zero-knowledge layer to ensure privacy and the association set provider layer that ensures compliance by vetting funds.

The three layers work together to preserve privacy while screening transactions for links to illicit actors such as hackers, phishers and scammers. The screening is dynamic, meaning a deposit is accepted but later found malicious, it can be removed.

Privacy pools are non-custodial, ensuring users retain full control over their funds, allowing even rejected deposits to move back funds to their original addresses.

As of now, the deposit limits are set between 0.1 ETH and 1 ETH, with the promise to increase the same after the initial battle testing period.

«This is only the beginning. The road to making privacy normal again is long and exciting, and we can’t do it alone!” 0xbow said on X.

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