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Arca Funds Seeks SEC’s approval for Tokenizing the US Treasury Bonds
Mar, 13 2020
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The Los Angeles based fund management
company Arca funds has been trying to take a historical step by tokenizing the
US Treasury bonds.
It has recently announced that it is
seeking approval from the Securities and Exchange Commission (SEC) to develop a
financial tool on its blockchain-based platform for the tokenization of the US
treasury bonds.
The idea of Arca Funds
Arca funds want to provide a new
technological opportunity to the investors to tokenize the outdated Treasury
bond system. The firm believes that only tokenization can provide more
efficiency in the market. The developers are trying to develop the platform
where one can pay for goods and services using the treasury fund tokens.
If Arca Funds is successful in doing so, it
will capture $330 billion investments in Government bonds dominated by US
Treasuries. Arca funds want to take the major chunk of the market in tokenizing
the bonds.
SEC Approval
Arca funds seeks approval from the
Securities and Exchange Commission (SEC) to explore this major milestone. If
Arca tokenizes the funds, it will become the first company to tokenize the
funds under the ‘Investment Company Act of 1940’ and it could serve the
majority of the US traders.
Arca funds CEO Rayne Steinberg elaborated
that the technology can make it possible to fill in the gap between the
payments and the investment vehicles.
Custodian for the Arca funds
The Fifth Third Bank, one of the
largest banks in the Ohio region, will be partnering with the Arca funds to act
as a custodian for the tokens. Also, DTAC LLC, a subsidiary of the tokenization
company TokenSoft will be functioning as a transfer agent for the platform.
ArCoin for Investors
The investors of Arca Funds will receive
ArCoins (ERC-1440standard) for their investments. The coins will provide
investors with the highest level of interoperability within the Ethereum
Ecosystem.
SEC Rejection with other projects
The other proposals of the Arca funds have
consistently been disapproved by the SEC. When Arca was part of the Bitcoin ETF
filing last summer with Wilshire Phoenix, the proposal has been disapproved by
SEC. Again in last month, SEC dismissed their proposal.
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Jayashree Ingle
CBW - External Analyst
INDIA
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