Swiss Firm to Launch Precious Metals-Backed Cryptocurrency

An asset management company based in Switzerland has announced it will launch a new digital asset backed by the price of copper, aluminium, nickel, cobalt, tin, gold and platinum.

Tiberius Group AG is an asset management company operating out of Zug, Switzerland which has been investing and trading in commodities since its founding in 2005. Presumably being located in “Crypto Valley” has led to some cross-mixing, as the company has announced its first endeavour into the blockchain world; it will launch its own crypto backed by the price of a basket of some of the most traded commodities, being: copper, aluminium, nickel, cobalt, tin, gold and platinum.

Tying the price of a crypto to the price of a physical asset is not new; just consider Venezuela’s ill-fated Petro, which is tied to the country’s oil market. However, Tiberius is likely to be more successful for two reasons. One: Venezuela’s President Nicolás Maduro has nothing to do with this project – always a good thing. But two, and more importantly, this coin is backed by a basket of commodities which will spread risk and make the coin less volatile, in much the same way a portfolio of stocks or cryptos is less volatile than one on its own.

Speaking with Bloomberg, Giuseppe Rapallo who is CEO of Tiberius Group had this to say:

“Instead of underlying the digital currency with only one commodity, we have chosen a mix of technology metals, stability metals and electric vehicle metals. This will give the coin diversification, making it more stable and attractive for investors.”

The coin, which is to be called the Tiberius Coin will be launched on October 1st on Estonian crypto exchange LATOKEN, which Rapallo described as meeting the strict standards stipulated by the company and Swiss regulatory standards.

Regarding the utility of commodity-backed coins however, Adrian Ash, research director at London-based BullionVault ltd has commented and is sceptical.

“There are dozens of firms who launched stablecoins linked to metals, and so far none of them have gained any traction,” he said. “They’re trying to solve a problem that doesn’t exist – all of this can be achieved without the additional cost of a distributed ledger.”

This is not to say Tiberius Coin will not have any utility. But naturally, the real question for the company is whether it will be taken up by its target market, i.e. commodities traders. Time will tell, but if successful this could represent a new way for the global commodities market to function. 

Furthermore, since Tiberius Coin will be commodity-backed, it will be possible to convert coins into the real materials they represent – but for a fee. As commodities are usually traded by the ton rather than the gram, you’ll need an extra 10,000 USD to convert your digital assets into physical ones…

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