Arca Launches First SEC Registered Fund Issuing Digital Securities
Digital assets investor Arca has launched the Arca U.S. Treasury Fund, a 40 Act fund which will offer its shares as digital securities, called “ArCoin". ArCoin was created by Arca Labs - Arca’s digital product development division - as the first product in an upcoming portfolio of complementary ’40 Act financial products.
“Our announcement today is a ground-breaking and transformative step toward the unification of traditional finance with digital asset investing as this new category of regulated, digital investment products is made available to investors,” said Rayne Steinberg, chief executive officer of Arca. “It is truly exciting to be pioneering new digital investment products through our Arca Labs division that marry best practices used in traditional finance with the many potential benefits of digital and blockchain technology—this is the next stage of development for the digital ecosystem.”
“We have seen a dramatic shift in our world from physical to digital during the last several years and an accelerated move toward digital in the last four months amid the COVID-19 pandemic,” said Jerald David, president of Arca Capital Management LLC, which oversees Arca Labs. “The digital assets ecosystem is a rapidly growing and evolving industry. We are establishing Arca Labs at the forefront of this industry to innovate digital investment products that provide regulatory oversight and transparency, along with daily valuation, that investors look for in their traditional core investment holdings. Furthermore, ArCoin offers enterprises the opportunity to manage their business operations, treasury management and payments with greater efficiency, less cost, faster settlement times and direct tracking of all transactions.”
ArCoin is built on the Ethereum blockchain and is an ERC-1404 token that provides customers digital access to sophisticated protections and transparency. The Fund is registered under the ’40 Act, providing daily net-asset-value (“NAV”) reporting, bankruptcy protections, periodic audited financial statements, and assets held in a statutory trust overseen by an independent board of trustees. Arca says that ArCoin offers digital enterprises and investors multiple use cases and widespread integration; individuals could use ArCoin as an alternative to volatility in other digital assets, while financial institutions and digital asset enterprises could use ArCoin for clearing and settlement, lending, treasury management, and payments in industries where banking has created friction.
The Arca U.S. Treasury Fund invests 80% of its portfolio assets in interest-bearing, short-duration, U.S. Treasury securities. According to the fund's registration statement, the other 20% will be invested in "other types of investment grade fixed-income instruments including bonds, debt securities and other similar instruments issued by various U.S. and non-U.S. public- or private-sector entities (“Fixed-Income Securities”)".
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