- This fund is the first blockchain-based product to be registered under the ’40 Act.
- The fund will invest 80% of its portfolio assets in interest-bearing short-duration, U.S. Treasury securities.
- ArCoin, the fund’s native token is an ERC-1404 token based on the Ethereum blockchain.
The SEC has approved Arca, an institutional asset manager to launch its blockchain transferred fund. A press release unveiled this news on July 6, noting that the fund is dubbed Arca U.S. Treasury Fund. Per the publication, the fund will allegedly invest 80% of its portfolio assets in interest-bearing short-duration, U.S. Treasury securities. The press release further noted that the fund is SEC-registered, closed-end in nature, and is already open to investors.
Commenting on reaching this milestone, Arca’s CEO, Rayne Steinberg said,
“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. 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.”
The fund is allegedly investing 80% of its portfolio assets in interest-bearing short-duration, U.S. Treasury securities.
The first registered investment fund running on the blockchain
Reportedly, the Arca U.S. Treasury Fund is one of its kind. This is because it is the first product registered under the Investment Company Act of 1940 to offer shares in the form of digital securities, namely ArCoin. ArCoin is an ERC-1404 token built on the Ethereum blockchain. As such, the token grants its users digital access to sophisticated protection and transparency.
According to Arca, ArCoin offers digital enterprises and investors multiple applications and widespread integration. For instance, individuals can use the token as an alternative to volatility in other digital assets. On the other hand, financial institutions and digital asset enterprises can use the coin for clearing and settlement. Apart from this, they can use the token for lending, treasury management, and payment in select sectors.
Seeing as the fund is registered, it will have to offer daily net-asset-value reporting, bankruptcy protections, and periodic audited financial statements. On top of this, it will have to offer assets held in a statutory trust that is overseen by an independent board of trustees.
Racing to go digital
Explaining why it was necessary to launch the Arca Treasury Fund at this time, Arca Capital Management LLC’s president, Jerald David, said,
“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. 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.”