Arca Labs, the innovation division of digital asset management firm Arca, and Oasis Pro Inc. (OPI), whose subsidiary, Oasis Pro Markets LLC, operates a multi-asset Alternative Trading System (“OATSPRO”) just announced and funded a joint venture to develop tokenized products under the Investment Company Act of 1940 (‘40 Act), otherwise known as Blockchain Transferred Funds (BTFs). As evidenced by a forthcoming study commissioned by Arca, broadening the number and scope of registered products currently offered within the digital asset securities ecosystem remains a critical goal to improving industry adoption.
Arca launched the industry’s first BTF in July 2020, with the introduction of the Arca U.S. Treasury Fund (the “Fund”), which issues its shares at digital asset securities. The creation and continued adoption of the Fund has validated this structure as an evolution of traditional financial instruments by incorporating blockchain technology. These proof points include the adoption and deployment of ArCoin, the digital asset securities representing shares of the Fund, into pilots and proofs of concepts. With this new joint venture, Arca and OPI will work together by commissioning the OPI/Arca Digital Asset Working Group for Securities, comprised of market participants representing market makers, traders, hedge funds, and traditional financial institutions.
Oasis Pro Markets provides a primary marketplace and, through OATSPRO, a secondary marketplace for trading digital asset securities, including a growing product suite that already includes equity, fixed income, asset-backed securities and now BTF’s. OATSPRO, through their state of the art matching engine, enables flexibility for institutions and other subscribers to trade digital (“blockchain”) securities on its Alternative Trading System(“ATS”) and make payment for those digital securities via digital cash (i.e., Stablecoins such as USDC and DAI and, when available, central bank digital currencies (“CBDCs”)) or fiat currencies through a custodian. The system provides for on-chain custody and settlement services for digital securities and digital cash, offering a streamlined process for transacting in private markets, with access to secondary market liquidity.
“Arca’s investor-centric approach is a hallmark of everything we do,” said Jerald David, president of Arca Labs. “As we lead the charge to build the digital asset securities market, it’s crucial to be as inclusive and collaborative as we can be from the start. That’s why partnering with Oasis Pro Markets and jointly establishing a working group to understand the needs of the customers using these types of products is essential to better serve the market.”
The OPI/Arca Digital Asset Working Group for Securities (DAWGS), nominated by OPI, will initially consult with both firms on the terms and conditions necessary to create products that will meet the needs of the industry through the adoption of digital asset securities. The initial research and development survey of this group will take place over the coming months, making recommendations on portfolio construction and culminating with the goal of developing a regulatory filing to create a second BTF.
“Arca Labs shares OPI’s commitment to regulation and creating innovative products, so the opportunity to partner together is exciting” says OPI CEO Pat LaVecchia. “As the first U.S.-regulated ATS to allow subscribers to settle trades of digital securities via payment through digital cash, we prioritized working with regulators to develop a solution that meets the needs of both regulators and our customers. We know that regulation is inevitable in digital assets and working with partners that share this same mindset is crucial to the development, validity, and success of the digital asset securities market and the ecosystem.”
The partnership with OPI seeks to bring more regulated, tokenized financial products to investors. Arca’s commitment to further establish the digital asset ecosystem through these select partnerships with trusted industry leaders signals the start of collaboration with like-minded companies who share the same values around regulation, operations, and customer experience, to come together collectively to offer products that meet the needs of institutional investors.
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 BTF, developed by our innovation division, Arca Labs. The Arca U.S. Treasury Fund is the first registered fund to issue its shares via the blockchain, which integrates 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 and 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.
Founded by seasoned Wall Street and blockchain veterans, Oasis Pro Markets’ mission, as a full-service investment bank, is to bridge the world of traditional finance and decentralized finance, “DeFi,” and to become the leading platform for the trading of public and private multi-asset digital securities globally. Oasis Pro Markets is a FINRA member firm that operates a multi-asset ATS (“OATSPRO”) to allow primary issuance and trading of digital securities.