Arca Labs, the innovative arm of Arca, the digital asset management firm, recently announced they will partner with Oasis Pro Inc., whose subsidiary, Oasis Pro Markets LLC, runs a multi-asset Alternative Trading System. According to the October 25, 2021, announcement, the two will enter into a joint venture under the Investment Company Act of 1940. Their goal is to develop tokenized products, often called Blockchain Transferred Funds (BTFs). Arca revealed that a recently commissioned study had shown that widening the scope of registered products offered within the digital asset securities sector was crucial to improving mass adoption.
.@arcalabs announces its partnership with OPM to develop more tokenized products under the ‘40 Act. We are very excited to begin this joint venture working to further establish the digital asset ecosystem ➡️https://t.co/xeK4uOoZZd pic.twitter.com/08D5zGO71J
— Arca Labs (@arcalabs) October 25, 2021
The History of BTFs
Arca was the first to launch a BTF in July 2020 when it launched the Arca US Treasury Fund. Shares of this fund are issued as digital asset securities. Since its creation, the fund has seen steady adoption. It has validated this structure as a viable evolution in the issuance of traditional financial instruments by using blockchain technology. Shares of this fund are represented by ArCoin.
With the joint venture, Arca and OPI will collaborate on the commission of the OPI/Arca Digital Asset Working Group for Securities. It is composed of market participants that represent traders, market makers, head funds, and traditional financial firms.
Oasis Pro Markets offers a primary marketplace and a secondary marketplace via the Alternative Trading System for trading digital asset securities. It includes a growing product suite that already includes fixed income, equity, asset-backed securities, and most recently BTFs. The Alternative Trading System uses a revolutionary matching engine that enables flexibility for institutions and other investors to trade blockchain-based digital securities.
They can make payments in digital currencies such as Central Bank Digital Currencies, Stablecoins, or fiat via a custodian. The system allows on-chain custody and settlement service for digital securities and digital cash, offering a streamlined process for transactions in private markets while offering access to liquidity in secondary markets.
Why It Matters
The joint venture has a goal of bringing more regulated tokenized financial products to mainstream markets. Joint ventures such as this one will make it possible to come up with products that meet the needs of institutional investors faster. The initial research and development survey for this joint venture is expected to occur in the coming months. It will culminate in making a regulatory filing for the creation of a second BTF.
What The Leaders Had To Say
According to Jerald David, the president of Arca Labs:
“Arca’s investor-centric approach is a hallmark of everything we do.” He added that “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 CEO of Oasis Pro Inc., Pat LaVecchia, also commented on the joint venture announcement. He said that:
“Arca Labs shares OPI’s commitment to regulation and creating innovative products, so the opportunity to partner together is exciting.” LaVecchia added that “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.”