Arca hopes to introduced tokenized securities
The company would issue the securities on the Ethereum blockchain
An institutional-grade investment firm, Arca Funds, wants to bring digitized securities to the investment community. It has filed an application with the Securities and Exchange Commission (SEC) to offer a fund overseeing the securities, which would be recorded and authenticated on the Ethereum blockchain
According to the SEC’s website, “The shares of beneficial interest registered hereunder will be issued as digitized securities, the ownership and transfer of which will be authenticated and recorded on the Ethereum blockchain as ERC-20 compatible tokens, and will not be listed for trading on any national market system trading platform. The shares are intended to function as digitized securities whose value is based on the value of the Fund’s portfolio, which will be composed primarily of U.S. Treasury securities.”
Arca asserts that using the blockchain for the securities is a monumental step forward. It explains that only valid transactions would be included on the blockchain, as nothing could be recorded without first being authenticated. Once the transaction is saved to the blockchain, which would be an automated process, the record becomes immutable and permanent.
In order to create the fund, Arca would introduce the Arca UST Coin, a type of stablecoin, with an initial net value (NAV) of $1. However, the coin is not a typical stablecoin and could be subject to some level of volatility that is less than that of cryptocurrencies, but which could be more than what is seen with most stablecoins.
Approximately 80% of the fund would be invested in securities, which would include bonds, Treasury notes and bills. The rest would be allocated to different types of fixed-income instruments, such as debt and bond securities that are available both domestically and abroad. The minimum initial investment is certainly attainable by most investors – it’s just $1,000.