Swiss-based commodities fund Tiberius Group plans to make a foray into cryptocurrencies with the launch of what may be the first digital money underpinned by physically deliverable metals including industrials such as aluminum and copper.
The fund, which manages $300 million of investments and also mines and trades metals, aims to launch the Tiberius coin, or tcoin, in July, its co-founder and chief executive Christoph Eibl said.
Allowing buyers to redeem tcoin for metal would give the currency a minimum value and avoid the extreme volatility of other cryptocurrencies such as Bitcoin, Eibl believes.
“We want to propose the idea of a cryptocurrency with real tangible net worth,” he told Reuters.
Millions of investors looking for quick returns and an opt-out from government-run money have surged into digital currencies, catapulting Bitcoin, the world’s biggest, from $1,000 to almost $20,000 and back to below $12,000 in the last 12 months.
Tiberius coin will not be the first to be underpinned by assets.
Gold-backed currencies such as DigixGlobal in Singapore and Goldmint in Russia are already in place. Others backed by real estate and diamonds are in development and Venezuela plans a cryptocurrency backed by oil, gas, gold and diamond reserves.
Tiberius coin appears to be the first backed by industrial metals, market analysts and participants said.
Because Tiberius is an established player in the metals industry, the tcoin may have a higher chance of success than previous digital coin offerings which have struggled to take off, Charles Hayter, founder of cryptocurrency data analysis firm Crypto Compare, told Reuters.
“The problem has always been that the crypto provider has never had a solid reputation or there has been speculation about whether the underlying metals exist or are stored securely. It sounds like you’ve got that in this case,” Hayter said.
The involvement of an investment fund may deter some investors who see cryptocurrencies as an escape from the regulated financial system and governments, however.
Unlike Bitcoin, which is decentralized, user-generated and without a single administrator, Tiberius coin will be operated by a corporation.
“That starts to jar against the libertarian element of the crypto community,” said Hayter.Speech.
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