Categories: Ethereum

Startup Arca Applies for SEC Approval to Issue Tokenized Securities on Ethereum Blockchain

Click here to view original web page at www.coinspeaker.com
Photo: Securities and Exchange Commission / Flickr

As the crypto industry continues to evolve further, a number of traditional institutional players are showing interest. U.S.-based institutional grade digital asset manager, Arca Funds, has recently submitted a new filing to the SEC.

The filing highlights that Arca is seeking regulatory approval from the SEC for a different type of stablecoin. Dubbed as the Arca UST Coins – the stablecoin will represent the shares of a bond fund. Also, the tokenization of the shares will occur in the form of ERC20 compatible tokens recorded on the Ethereum blockchain.

Furthermore, before recording a transaction on the blockchain, Arca will authenticate it completely. This will allow the blockchain to store only authorized and valid transactions. Once recorded on the blockchain, the data is immutable.

Investment Details

Arca notes that a minimum of $1000 needs to be invested in these tokenized securities with a target net asset value (NAV) of $1 per share. Moreover, 80% of the amount invested will go to U.S. Treasury securities. The remaining 20% will have a safer exposure to fixed income instruments. This includes fixed income instruments like bond debt issued by any private or public entities in the U.S. or outside. The filing reads:

“Investment Strategy: will be invested in cash or cash equivalents including money market instruments, commercial paper, bank certificates of deposit, banker’s acceptances, and repurchase agreements collateralized by Treasury Securities”.

However, Arca has clarified that the NAV for its stablecoins will have some volatility. The SEC filing reads:

“It is therefore anticipated that the underlying portfolio, and the NAV of Arca UST Coins, will have relatively little volatility. Accordingly, although holders of Arca UST Coins could experience greater NAV volatility compared to typical stablecoins, such volatility will be relatively limited.”

On a good note, the prospectus promises investors of quarterly dividend income from the interest payments. Also, the fund’s “investment objective is to seek maximum total return consistent with preservation of capital”.

Buying the Arca UST Coins

To buy the tokenized fund shares, investors first need to create a wallet address through the Arca application. Later, investors need to ensure that their wallet address is whitelisted with the Transfer agent. Upon whitelisting of their wallet address, investors can seamlessly “transfer money from a linked bank account to the Fund in return for shares of the Fund,” using the Arca application.

Arca has clarified that it won’t sell its Arca UST stablecoins through any traditional stock exchange, national market system, or any decentralized exchange. Thus, investors can only carry secondary transactions on a peer-to-peer basis.

Currently, Arca hasn’t disclosed how many of the Arca UST Coins it plans to sell. However, the prospectus notes that offering would require Arca to raise at least $25 million for the fund to have stable operations.

You May Also Like
cinerama

Illuminati, Mason, Anonymous I'll never tell. I can tell you this, global power is shifting and those who have the new intelligence are working to acquire this new force. You matter naught except to yourself, therefore prepare for the least expected and make your place in the new world order.

Disqus Comments Loading...
Share
Published by
cinerama

Recent Posts

Watford FC to brand Bitcoin logo on the jersey

The initiative is being carried out as a part of a brand partnership with sports betting site Sportsbet.io. Sportsbet.io's marketing… Read More

1 hour ago

Latest Bitcoin price and analysis (BTC to USD)

At the time of writing, Bitcoin (BTC) is trading at just above $10,300 after gaining about 1% since last week.BTC… Read More

1 hour ago

Johnstone: How To Defeat The Empire

Authored by Caitlin Johnstone via CaitlinJohnstone.com, One of the biggest and most consistent challenges of my young career so far… Read More

1 hour ago

Today’s Bitcoin Drop Driven by Massive Volume Influx

Bitcoin has been facing a bout of sideways trading for the past several days, but today’s drop to below $10,200… Read More

1 hour ago

L.A. to Choose Blockchain Pilot Project at CIS Conference

With a growing interest in blockchain solutions for government, the city of Los Angeles has partnered with organizers of a… Read More

1 hour ago

Bitcoin’s heading to a new all-time high along with the S&P 500, says Fundstrat’s Tom Lee

watch nowTalk about a bitcoin bull case.The digital currency is headed to new record highs, says Tom Lee, co-founder, managing… Read More

1 hour ago

This website uses cookies. We use these cookies to collect data about your interaction with our website for the purpose of continuously improving your experience with our site. For more information we encourage you to read our privacy policy.

Read More