The US DTCC does not recognize that Bitcoin has value: the value of any cryptocurrency ETF collateral will return to zero starting on 4/30

This site (120BtC.coM): The United States Securities Depository and Clearing Corporation (DTCC) announced today (27th) that as part of the annual update of credit lines, it will formally adjust certain The collateral value of the security, with the emphasis being placed on the fact that no collateral value will be provided to ETFs or investment vehicles that invest in Bitcoin or other cryptocurrencies.

“Any ETF or other investment vehicle containing Bitcoin or any other cryptocurrency as an underlying investment will not provide any collateral value and therefore will be subject to a 100% valuation haircut (haircut, usually refers to the haircut from percentage deducted from the market value of assets used as security or collateral)”

This measure will take effect from April 30, 2024. Updates to the rules may affect the position values ​​applicable to Collateral Monitor applications.

Will DTCC’s new regulations affect institutional crypto investment layout?

DTCC is the custody and settlement center for stocks, bonds, and asset securities in the United States. It is responsible for the settlement and delivery services of most securities transactions in the United States. This time, DTCC has implemented a 100% valuation discount for holding cryptocurrency-related ETFs and investment tools. In addition to the possible impact on the valuation method of collateral, some communities are also worried that the investment strategies of many institutions will be affected.

However, a crypto KOL @KO_Kryptowaluty said there is no need to worry too much. According to his observation, this update only applies to settlements between entities in the line of credit (LOC) system.

He explained that in the settlement of financial transactions, it is very important to distinguish between different settlement methods such as simultaneous delivery of debit notes (DvP) and line of credit (LOC). DvP is a standard settlement mechanism used in most securities transactions, ensuring that delivery of securities occurs only when a corresponding payment (cash or other assets) is made; whereas a credit line is a financial instrument that allows market participants to utilize borrowed funds To finance short-term transactions or meet other liquidity needs.

According to his judgment: The future use of cryptocurrency ETFs for lending and as collateral for securities brokerage operations remains unchanged and continues to depend on the risk appetite of individual brokers. Ignore unfounded panic; nothing substantial is happening.

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