What are CryptoDepository Receipts?

A CryptoDepository Receipt is a smart contract that is meant to represent something. It is a cryptographic note that can represent anything, any asset, any rights, currency or anything else in a “real world” transaction.

CDR’s are what we denominate KYC (Know Your Customer) compliant. Which means that any institution which underwrites CryptoDepository Receipts must have full ID and personal information about the customer. This means that online exchanges which do not require identification and are not KYC compliant cannot emit or guarantee CryptoDepository Receipts. The reason for KYC requirement is obvious: to be able to guarantee a real world asset, the asset must be owned by someone. It is impossible to offer any guarantees for an anonymous asset.

CryptoDepository Receipts must also be compliant with Anti Money Laundering (AML) regulations. This is a fairly obvious requirement as well, since illegally obtained assets may not be used in any legal transaction or it’d constitute one of the phases of money laundering, which is injecting the illegal value into the economy.

There is at least one institution offering CryptoDepository Receipts at the time of this writing. Jibrel Network seems to operate out of Switzerland and their motto is “Putting traditional assets on-chain”. Their system emits CryDR tokens which are exchangeable for the real world asset that is placed under a CDR emitted by them. Full decentralization of Jibrel DAO is planned for late 2018.

We hope this brief introduction has given you an idea about what CryptoDepository Receipts are. They are a novel concept and do not have many companies emitting these types of notes yet. Tying crypto assets to real world assets has faced difficulties in the past, including regional regulations, differing rules and political influence in some countries, legal mismatch between international systems and so on. For example, regulation in a South American country may not allow a regional asset such as real estate to be placed under a receipt in a foreign country. Some assets are also subject to additional restrictions, such as controlled goods, some commodities, and specifically regulated products like alcohol or tobacco, shares related to these and other indirectly associated assets (such as shares in corporations dealing these). It is important to check your regional regulations and consult with an attorney before engaging in CDR-guaranteed transactions.

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Published by Crypto Bill - Bill is a writer, geek, crypto-curious polyheurist, a dog's best friend and coffee addict. Information security expert, encryption software with interests in P2P networking, decentralized applications (dApps), smart contracts and crypto based payment solutions. Learn More About Us