New York, NY, Feb. 28, 2022 (GLOBE NEWSWIRE) -- Arca Labs, the innovation division of digital asset management firm Arca, today published a white paper, “Blockchain Transferred Funds (BTFs): The New Frontier for Investment Funds,” which introduces a new fund structure that incorporates blockchain technology. Arca believes blockchain will revolutionize investment funds’ role in the financial system.
Innovative technologies have impacted and advanced many industries, yet their integration into financial services products, processes, and infrastructure has been less frequent.
Enter the blockchain transferred fund (“BTF”)—a pooled investment vehicle registered under the ‘40 Act that issues its shares on the blockchain. “Arca Labs sees blockchain transferred funds as the next iteration of our financial system, combining the best of traditional finance with the power of blockchain to achieve optimal performance, issuance, and investment processes,” said Jerald David, president of Arca Labs. “The team at Arca Labs has been laying the groundwork for this digital asset securities ecosystem since the firm’s inception; we’re excited to witness the positive impact that blockchain will have on the next generation of pooled investment vehicles.”
Truly innovative technologies, like blockchain, profoundly challenge our concept of utility and stimulate previously unimagined possibilities. Thus, the journey to create this product wrapper originated from Arca’s belief that blockchain technology could solve some of the industry’s most significant challenges: transferability and time.
Currently, numerous steps and intermediaries are involved in buying or selling a fund, limiting funds' purpose solely to investing. Integrating blockchain can allow for peer-to-peer transference and the removal of intermediaries, leading to almost immediate benefits.
If the past is a guide, Arca believes early adopters will eclipse market participants who delay implementing new technology-driven applications. Similar to the introduction of exchange-traded funds (“ETFs”) in the marketplace, which improved the daily market close liquidity limitations of mutual funds, blockchain technology has introduced a means to improve the structural constraints of ETFs. As immense as the ETF market is, Arca believes that the BTF opportunity is just as promising.
Coalition Greenwich, a leading global provider of data, analytics, and insights to the financial services industry, contributed to the paper.
“Blockchain technology has the potential to disrupt and challenge our assumptions for the investment fund industry,” said David Easthope, Head of Fintech, Market Structure, and Technology at Coalition Greenwich and a contributing editor. “Although innovative technologies have often outpaced the traditional financial services industry, we see swift adoption underway.”
The paper follows Arca’s recent work, The Future of Securities: A Digital Asset Securities Study, which found that 77% of capital market participants believe traditional securities will be digitized in 5-10 years.
To register for Arca’s upcoming webinar, “Blockchain Transferred Funds (BTFs)—Innovating Pooled Investment Funds,” on March 8, please visit www.ar.ca/btf.
About Arca
Arca is an asset management firm investing and innovating in digital assets. Our mission is to offer asset management products that meet the operational, compliance, legal, and regulatory standards needed for sophisticated investors to gain exposure to digital assets. Arca’s product set includes actively-managed hedge funds, passive vehicles, and a first-to-market blockchain transferred fund (“BTFs”), developed by our innovation division, Arca Labs. Arca was the first to launch a registered fund to issue shares via the blockchain, integrating blockchain’s peer-to-peer technology and instant settlement features with traditional investment vehicles. Arca’s founders and senior team members have worked in traditional finance and FinTech across many asset classes. Now, we are working to bring the best of traditional finance practices to digital assets to deliver the right product to the right investor at the right time. Arca Capital Management (dba Arca Labs) is an SEC registered investment adviser located in Los Angeles, CA.
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