By
Chimamanda U. Martha
August 18th, 2023
The transfer of the digital agent role has enabled the burning of the fund’s existing outstanding balances, spontaneously being redeemed through Securitize’s new smart contract to each shareholder.
Arca Labs, the innovation branch of digital asset management firm Arca, has collaborated with Securitize, a US-based tech firm to launch tokenized financial products.
The announcement which was made on September 23 said that Securitize had made a deal to furnish Arca Labs with smart contracts and issuance platform, commencing the initiative with Arca’s tokenized fund called “Arca US Treasury Fund”, which was floated in July 2020.
Arca has proclaimed itself as the first treasury fund registered under the Investment Company Act of 1940 to allow stocks of digital assets using the Blockchain. While the fund undergoes similar regulations as a mutual fund, it varies by giving exposure through Ethereum-based digital asset security tokens known as “ArCoin”. According to a statement by Arca, the fund will essentially invest at least eighty percent of assets in the US Treasury Securities.
Securitize has adopted the new position as the transfer agent from TokenSoft, another blockchain-based Tech firm dealing with digital assets. Securitize will be responsible for governing regulatory compliance mandates such as investor verification, KYC, and anti-money laundering policies. Since Securitize is an authorized transfer agent consisting of over two hundred clients with approximately 500 Million dollars in regulated securities, it will also be involved in the role of onboarding customers and issuing Arca’s fund’s shares through Arcoin.
The transfer of the digital agent role has enabled the burning of the fund’s existing outstanding balances, spontaneously being redeemed through Securitize’s new smart contract to each shareholder. Moreover, the collaboration has also planned to launch a jointly-offered tokenized financial product sometime in the future.
On the recent partnership with Securitize, President of Arca Labs, Jerald David said that enabling an immaculate transition for investors in Arca’s Fund was of the highest priority.
The announcement statement elaborated on the trouble of meeting investor demand because of a few tokenization companies meeting the rigorous regulatory and operational thresholds. According to the statement, both companies are pursuing the idea of gauging the rise of fast-developing blockchain technologies in the current financial services regulatory framework.
Securitize is a company established in 2017. The company has pioneered a completely digital end-to-end platform for issuing, managing, and trading digital asset securities that boasts a presence of around 400,000 investors at present.
