Today we are pleased to announce a new relationship with Signature Bank, one of the most innovative banks in the digital assets space. We’ve spent years cultivating this relationship, which we think can help pave the way for ArCoin, the digital securities market, and the financial markets as a whole to grow. With today’s announcement, Signature Bank clients with access to the bank’s Signet™ digital payment platform can initiate purchases of shares of the Arca US Treasury Fund (the “Fund”) from their Signet wallet.
A pioneer in servicing the digital assets industry, Signature Bank’s Signet platform is a blockchain-based, real-time payments system that operates 24/7, 365 days a year. Each Signet within the platform is equal to one U.S. dollar (held in escrow at the Bank). With this new functionality, customers of Signature Bank who have an active Signet account can use the platform to efficiently move U.S. dollars from their Signet account to purchase shares of the Fund. This integration, while increasing connectivity for mutual customers of Signature Bank and Arca, also leverages the Signet platform's goals of reducing costs and transaction time for Signature Bank customers.
Those of us who have been in the digital asset space for the past few years have seen the emergence of ‘on ramps’ and ‘off ramps’ and how differently capital flows in this space compared to the traditional financial markets. The traditional financial system was set up to accommodate paper money, however, it wasn’t created to handle the transference of said paper money. Therefore "bolt-on" solutions like wires and ACH transactions were created that send messages in the form of debits and credits with the actual funds being transferred in bulk at a later time. These are not solutions you would necessarily choose if you were re-working the financial system because they take too much time- and the digital assets space is moving fast. So on ramps and off ramps were created to reduce friction (time) for funding. In its simplest form, if a commercial client of Signature Bank wanted to transfer US Dollars to Coinbase, the transaction could take days using the current infrastructure. But if this client has a Signet account, the client could quickly transfer a “Signet”, (equal to one US Dollar), to Coinbase in a fraction of the time, without a multiple-day delay. Similarly, with this implementation, Signet users can use the Signet platform to quickly transfer US dollars to subscribe to the Arca U.S Treasury Fund, thus substantially reducing the time it takes to subscribe to the Fund.
Our relationship with Signature Bank is a continuation of a series of important and foundational relationships built since the launch of the Arca US Treasury Fund in July 2020. The Fund’s launch marked the first time a registered ‘40 Act Fund issued its shares as digital securities (ArCoin) marking the evolution of traditional vehicles like mutual funds and exchange-traded funds (ETFs) to blockchain transferred funds (BTFs).
Since the launch of the Fund, we have been working to connect the digital securities market. We recently announced that we completed integration with eight leading digital custodians to provide optionality for subscribers to the Fund in terms of custody and connectivity. Secondly, we are continually seeking more seamless ways to subscribe to the Fund, with the integration with Signet being the first. Simultaneously, we helped improve liquidity for investors in the Fund by increasing redemption offers from quarterly to monthly.
Our mission is to help build an interconnected digital securities ecosystem through ArCoin. We will continue to focus on understanding the needs of the community and work with other members of the community to implement these solutions. Not only are we increasing the usability for ArCoin, but we hope to push forward the digital securities ecosystem to allow for a faster, more seamless movement of assets. Stay Tuned.
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Disclaimer: This commentary is provided as general information only and is in no way intended as investment advice, investment research, legal advice, tax advice, a research report, or a recommendation. Any decision to invest or take any other action with respect to any investments discussed in this commentary may involve risks not discussed, and therefore, such decisions should not be based solely on the information contained in this document. Please consult your own financial/legal/tax professional.
Statements in this communication may include forward-looking information and/or may be based on various assumptions. The forward-looking statements and other views or opinions expressed are those of the author, and are made as of the date of this publication. Actual future results or occurrences may differ significantly from those anticipated and there is no guarantee that any particular outcome will come to pass. The statements made herein are subject to change at any time. Arca disclaims any obligation to update or revise any statements or views expressed herein. Past performance is not a guarantee of future results and there can be no assurance that any future results will be realized. Some or all of the information provided herein may be or be based on statements of opinion. In addition, certain information provided herein may be based on third-party sources, which is believed to be accurate, but has not been independently verified. Arca and/or certain of its affiliates and/or clients may now, or in the future, hold a financial interest in investments that are the same as or substantially similar to the investments discussed in this commentary. No claims are made as to the profitability of such financial interests, now, in the past or in the future and Arca and/or its clients may sell such financial interests at any time. The information provided herein is not intended to be, nor should it be construed as an offer to sell or a solicitation of any offer to buy any securities, or a solicitation to provide investment advisory services.