Digital Depository Receipts

Definition ∞ Digital tokens representing ownership of underlying traditional assets held by a custodian. These receipts provide a blockchain-based method to trade or transfer interests in securities, commodities, or other financial instruments. They bridge conventional financial markets with distributed ledger technology. This mechanism aims to increase liquidity and reduce settlement times for traditional assets.
Context ∞ Digital depository receipts are a topic of interest in the tokenization of real-world assets, offering a pathway for institutional adoption of blockchain technology. Discussions center on regulatory clarity, custodial arrangements, and the legal enforceability of ownership claims. Critical future developments involve cross-border interoperability and the expansion of supported asset classes.