According to a press release on Monday, July 6, 2020, Arca Labs, a digital asset investment firm, becomes the first-ever company to trade an SEC-registered Ethereum-based fund, ArCoin.
The bizarre case of the U.S Securities Exchange Commission (SEC) refusing to register a Bitcoin ETF gets even stranger as the securities regulator approved the trading of digitally transferable securities, in a first of its kind. ArCoin, the digital securities built on Ethereum blockchain, has become the first asset of its kind to be successfully registered under the Investment Act of 1940.
Arca Labs further plans to build more digitally transferrable assets that will be compliant to SEC's laws in what they term as “portfolio of complimentary '40 Act financial products”. Each ArCoin will represent a share in Arca's U.S Treasury Fund, which is 80% interest-bearing, short-duration, U.S. Treasury securities.
A Groundbreaking Announcement
The blockchain world is looking at more regulated assets with this latest SEC approval giving a sense of a possible ETF approval in years to come. Rayne Steinberg, CEO of Arca Labs, referred to the announcement as “groundbreaking and transformative” in connecting the digital asset market to traditional finance. The CEO stated,
“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 Benefits of ArCoin
The purpose of this Ethereum 1401-standard token is to combine the qualities of traditional finance regulation to the resilience of blockchain technologies. This digital innovation will enhance the overall security, provide regulatory oversight and transparency, otherwise lacking in the traditional field. Jerald David, the president of Arca Capital Management LLC, parent company to Arca Labs, said:
“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.”
BEG reported Arca's plans to launch the Blockchain traded fund (BTF) back in February to tokenize U.S Treasury bonds and bills.