CDRX Introduces Crypto Depository Receipts (CDRs)
November 17, 2018 6:24 am,
The Fintech company CDRX has announced the launch of Crypto Depository Receipt (CDRs) by Quarter one of 2019. These are the securitized equity tokens issued on a Blockchain that hold a class of shares. It allows for fractional ownership of shares, thus removing the need for share splits. These tokens are the significant step as it will help in the equity market by simplifying stock ownership and automating dividend allocation and transfer of ownership processes.
This is a step forward by the company to replace traditional investment instrument like equities and bonds. CDRs will bring investment opportunities to everyone that purchases the token.
Following are the benefits of CDRs: –
- CDRs are based on Blockchain that will help keep track of contracts and ownership replacing manual paper works.
- CDRs have real-time settlements.
- It has extremely low transaction costs as it lowers the commission to around 15%
- There is absolutely no error which leads to huge cost savings.
- Dividend allocations are cheaper to administer to investors through CDRs since “on token” functionalities enable issuers to pay dividends directly while avoiding bank fees.
How CDRs works: –
Shares are first purchased from the entity or market itself and placed with some custodian bank or trust. Custodian then issues CDRs on a Blockchain in the form of tokens. Each CDR is ‘securitised’ or legally backed one-for-one by a share or stock held by the custodian, and clients can deposit and withdraw these securitized assets via digital wallets. Basically, CDRs give owners the inherent benefits that come with stock ownership, along with a solution to traditional financial market inefficiencies.