Arca Capital Management filed a Form N-1A registration statement for Arca U.S. Treasury Money Market Digital Fund tells us, "Arca U.S. Treasury Money Market Digital Fund seeks to provide investors with as high a level of current income as is consistent with the preservation of shareholders' capital and liquidity. The Fund seeks to maintain a stable $1.00 net asset value (NAV) per share.... The Fund will invest, under normal circumstances, exclusively in U.S. dollar cash, U.S. Treasury bills, notes and bonds with 93 days or less to maturity, overnight repurchase agreements fully collateralized by U.S. Treasury securities, and registered money market funds that themselves invest solely in the foregoing assets." This will be the 6th manager to launch a Stablecoin Reserves money market fund, following BlackRock's Circle Treasury Reserves, and Stablecoin Reserves offerings from State Street, Goldman Sachs, BNY and Fidelity. (See our March 23 News, "Fidelity Files for Reserves Digital Fund, 5th Stablecoin Reserve MMF.")
The filing says, "The Fund intends to invest in a manner that will satisfy the requirements for eligible reserve assets in which payment stablecoin issuers are permitted to maintain under the Guiding and Establishing National Innovation for U.S. Stablecoins Act (the 'GENIUS Act') and regulations adopted thereunder, to support investment in the Fund by eligible stablecoin issuers seeking to comply with such requirements. The Fund intends to be a 'government money market fund,' as such term is defined in or interpreted pursuant to Rule 2a-7 under the Investment Company Act of 1940, as amended (the '1940 Act'). Accordingly, the securities purchased by the Fund will be subject to the quality, diversification, and other requirements of Rule 2a-7 under the 1940 Act, and other applicable rules adopted by the Securities and Exchange Commission."
It explains, "Rule 2a-7 sets forth a liquidity fee framework whereby a liquidity fee may be imposed under certain circumstances, such as a decline in a money market fund's weekly liquid assets. However, government money market funds are not required to adopt a liquidity fee framework and accordingly, the Fund has not adopted such a framework. The Fund has adopted a non-fundamental investment policy to invest, under normal circumstances, at least 80% of the value of its net assets, plus the amount of any borrowings for investment purposes, in U.S. Treasury securities, repurchase agreements collateralized by U.S. Treasury securities and shares of registered U.S. Treasury money market funds. The Fund will provide shareholders with at least 60 days' prior notice of any change in this investment policy."
The filing tells us, "The Fund's Transfer Agent uses blockchain technology in relation to maintaining the official record of share ownership. The use of blockchain technology is relatively new and still evolving for mutual funds. Similar to traditional fund recordkeeping systems, all Fund and shareholder records in the Transfer Agent's system are under the full and complete control of the Fund's Transfer Agent.... [T]he Fund's Transfer Agent [tbd] ... maintains the official record of share ownership through an integrated recordkeeping system with records in book-entry form and digital representations of Fund shares that are tokenized on the [tbd] blockchain. A transfer of the Fund's shares on the blockchain acts as an information source for the Transfer Agent to register a transaction in its book-entry records. The Transfer Agent will reconcile book-entry and blockchain transactions on at least a daily basis."
It continues, "A blockchain is an open, distributed ledger that records transactions between two parties in a verifiable and append-only manner using cryptography. Transactions on the blockchain are verified and authenticated by computers on the network. The process of authenticating a transaction before it is recorded ensures that only valid and authorized transactions are permanently recorded on the blockchain in collections of transactions called 'blocks.' Blockchain networks are based upon software source code that establishes and governs their respective cryptographic systems for verifying transactions."
They state, "In order to facilitate the use of blockchain technology, a potential shareholder must have a blockchain wallet. Arca Labs, LLC, the Fund's blockchain administrator ... [or the Transfer Agent] will provide investors with a [tbd]-based wallet. Investors may, for their convenience and in their sole discretion, elect to use their own wallet if registered by the Transfer Agent or its agents. A blockchain wallet is a software application which stores a user's 'private key' and related digital or tokenized assets and is used to facilitate sending digital or tokenized assets on a particular blockchain."
The filing adds, "The Transfer Agent's blockchain-integrated recordkeeping system is a permissioned system created by the Transfer Agent on a public blockchain network using smart contract technology [(or token configuration, in the case of Stellar)] to incorporate a whitelist of permissioned wallets into the relevant smart contract alongside various administrative control functions. Unlike permissionless tokens, Fund shares recorded on the Transfer Agent's blockchain-integrated system are under the unilateral control of the Transfer Agent. The Transfer Agent is responsible for maintaining the accuracy of Fund share ownership on any blockchain network used by its blockchain-integrated system and has the ability to correct errors and unauthorized transactions in, and limit the transferability of, Fund shares."
It also says, "It is anticipated that Fund shareholders will have the benefit of shares that may be operated on more than one blockchain, such as the blockchains noted under 'Your Account.' This feature may provide shareholders with the ability to move the record of ownership between blockchain wallets ... which may include through interoperability, which is facilitated by the Transfer Agent's process of burning and minting the digital representations of shares on each blockchain and the Transfer Agent continuing to maintain the Fund's official records through integrated recordkeeping. These features may permit applicable shareholders to potentially take advantage of the benefits of a supported blockchain of their choice ..., such as transaction speed or efficiency, while also helping facilitate the Fund's shares being available for purchase, sale, or transfer in the broader blockchain ecosystem."
The filing adds, "The recording of Fund shares on the blockchain will not affect the Fund's investments. The Fund will not invest in any digital assets (such as, among other things, virtual currencies). The Fund's investment manager expects that the blockchain-integrated recordkeeping system will provide operational efficiencies without negatively impacting the quality of the Transfer Agent's services."
Discussing the "Risks of Digital Securities, they write, "Peer-to-peer transfers of the Fund's shares may be initiated by shareholders on the [tbd] blockchain. The entities that support the ability of shareholders to engage in such transactions, including the Transfer Agent and the [tbd] network, are not licensed under the virtual currency or money transmission regulations of any state in the United States or registered with the U.S. Department of the Treasury Financial Crimes Enforcement Network ('FinCEN'). If any regulatory authority were to assert that additional licensing or registration was required for any such party, it could affect their operations or viability and could adversely affect the ability of shareholders to engage in peer-to-peer transfers of Fund shares. This in turn would have a material adverse effect on the liquidity of Fund shares and the holders' ability to transfer Fund shares."
They state, "Regulation of digital assets, blockchain technologies and digital asset platforms is currently developing and likely to rapidly evolve, varies significantly among international, federal, state and local jurisdictions and is subject to significant uncertainty. Various legislative and executive bodies in the United States and in other countries are currently considering, or may in the future consider, laws, regulations, guidance, or other actions related to digital assets and blockchain technology, which could directly or indirectly impact the Fund, and thus the Fund's shareholders. Failure by the Fund or any of its service providers to comply with any such laws, rules or regulations, many of which may not exist yet or are subject to interpretation and may be subject to change, could result in a variety of adverse consequences to the Fund (and thus to the Fund's shareholders), including civil penalties and fines."
Finally, the filing says, "Blockchain networks currently face an uncertain regulatory landscape in not only the United States but also in many foreign jurisdictions. Various foreign jurisdictions may adopt laws, regulations or directives that affect the networks and their users, developers and service providers that fall within such jurisdictions' regulatory scope. Such laws, regulations or directives may conflict with those of the United States or may directly and negatively impact the Fund and its service providers. The effect of any future regulatory change is impossible to predict, but such change could be substantial and adverse to the shareholders, the Fund and the Fund's service providers."
For more on Stablecoin Reserve funds, see these Crane Data News stories: "'Dec. MFI: MMFs Hit $8.0T, Top 10; JPM '26 Outlook; Stablecoin Reserves" (12/5/25), "'State Street Files for Stablecoin Reserves MMF; BNY's Stephanie Pierce" (11/19/25), "BNY Stablecoin Reserves Goes Live; ICI: Assets Eke Out Record $7.5T" (11/14/25),"BNY's Vince on Q3 Call: Money Market Evolution, Dreyfus, Stablecoins" (10/22/25), "BlackRock Breaks $1 Trillion in Money Funds; Offers Stablecoin Reserve" (10/17/25), "Sept. MFI: Assets Break $7.6T; Stablecoin Reserves; JPM on Offshore MFs" (9/8/25), "BNY Dreyfus to Launch Stablecoin Reserves Fund; Joins Goldman, Circle" (8/20) and "Goldman Files to Launch Stablecoin Reserves Fund; Circle Q2 Earnings" (8/13/25).
