Startup Arca Seeks SEC Approval for US Treasury Bond-Backed Stablecoin

Spread the love

The Los Angeles-based digital asset manager filed a prospectus with the Securities and Exchange Commission (SEC) Friday for a bond fund whose shares would be tokenized on the ethereum blockchain.  Arca hopes the SEC will approve the product later this year, a spokesperson said.

The Arca U.S. Treasury Fund would be available to the general public, but not traded on any stock exchange or alternative trading system, according to the filing.

Arca is seeking regulatory approval to sell a new type of stablecoin to retail investors.

However, shares in the fund (referred to as “Arca UST Coins”) would be represented as ERC-20 tokens, which run on top of ethereum. And Arca is framing the product as a form of stablecoin, or cryptocurrency designed to maintain parity with a traditional asset like the U.S. dollar, although the company cautioned that it may be slightly less stable than other such products on the market.

The minimum investment in the fund would be $1,000, with a target net asset value (NAV) of $1 per share. At least 80 percent of the fund would be invested in U.S. Treasury securities, with the rest in debt issued by various public or private entities inside and outside the U.S.

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

Investors would receive quarterly dividends from the interest payments, according to the prospectus, although the fund’s “investment objective is to seek maximum total return consistent with preservation of capital.” In other words, stable value rather than big profits.

To buy shares from the fund or from another investor, traders “must first establish a wallet address through the Arca application and ensure that it is whitelisted with the Transfer Agent,” according to the prospectus. “Once an investor’s wallet address is whitelisted, the investor can use the Arca application to transfer money from a linked bank account to the Fund in return for shares of the Fund.”

It is not clear how many of these purportedly dollar-pegged tokens Arca aims to sell; the prospectus says the offering would need to raise $25 million for the fund to have viable operations.

Arca is not to be confused with NYSE Arca, one of several firms seeking to launch a bitcoin exchange-traded fund (ETF) in the U.S.

9 Comments on “Startup Arca Seeks SEC Approval for US Treasury Bond-Backed Stablecoin”

  1. I’ve learn several excellent stuff here. Definitely worth bookmarking for revisiting.
    I wonder how a lot attempt you put to create this sort of excellent informative site.

  2. Hmm is anyone else experiencing problems with the pictures on this blog loading? I’m trying to determine if its a problem on my end or if it’s the blog. Any feedback would be greatly appreciated.

  3. I just like the valuable information you supply on your articles. I抣l bookmark your weblog and take a look at again right here regularly. I am quite certain I will learn lots of new stuff proper here! Best of luck for the next!

  4. Definitely believe that which you stated. Your favorite justification seemed to be on the net the easiest thing to be aware of. I say to you, I certainly get annoyed while people consider worries that they just do not know about. You managed to hit the nail upon the top and also defined out the whole thing without having side effect , people could take a signal. Will likely be back to get more. Thanks

  5. Hi, i believe that i noticed you visited my weblog thus i got here to go back the prefer?.I’m attempting to in finding things to improve my website!I suppose its ok to make use of a few of your ideas!!

  6. Excellent post. Keep writing such kind of information on your site.
    Im really impressed by your site.
    Hey there, You’ve done a fantastic job. I will certainly digg it and for my part suggest to my friends.
    I am sure they’ll be benefited from this site.

  7. Amazing blog! Is your theme custom made or did you download it from somewhere?
    A design like yours with a few simple tweeks would really make my blog shine.
    Please let me know where you got your design. Many thanks

  8. Simply wish to say your article is as amazing. The clearness in your post is just spectacular and i can assume you’re an expert on this subject. Well with your permission allow me to grab your feed to keep up to date with forthcoming post. Thanks a million and please keep up the rewarding work.

Leave a Reply

Your email address will not be published. Required fields are marked *