Arca, the digital asset-focused investment management firm, is seeking SEC approval for a tokenized treasury bond product, according to a recent filing.
Named Arca UST Coins, the product will represent a share of the Arca U.S. Treasury Fund which will pay its holders a quarterly dividend derived from interest payments of fixed income instrument investments. According to the filing, Arca U.S. Treasury Fund's portfolio will consist of at least 80% U.S. Treasury securities including bills, bonds, and notes. The remaining portfolio will be made up of other fixed income instruments like bonds, debt securities issued by U.S. and non-U.S. public or private entities.
To purchase the Arca UST Coins, investors are required to invest a minimum of $1,000 and create a wallet via an Arca-developed mobile app. As stated in the filing, "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. The transaction will be recorded in real time on the blockchain, enabling the Fund and its Transfer Agent to track transactions in the Fund’s digitized securities on a real-time basis."
Arca UST Coins are built on the Ethereum blockchain with an average duration of eight years. An Arca spokesperson expects the product to be approved by the end of 2019.