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The commodities market is one of the few places that blockchain technology has not yet left its mark on. But that may soon be changing with the work of Swiss-based commodities fund Tiberius Group, a traditional firm that will be one of the first to take the leap. The move follows a turbulent year starting from the adoption of Bitcoin futures with investments from some of the largest firms in the world pouring into Bitcoin and other crypto assets.
The Tiberius Group manages funds related to commodities such as energy, industrial metals, precious metals, and agricultural derivatives, but is now looking to tokenize its fund and concept. Rather than create something speculative, their so-called “Tiberius coin” will avoid the extreme volatility of regular crypto-assets and will be used as a hedge against inflation. They will be pinned by especially stable commodities such as platinum, gold, and others.
Just like most traditional commodities, the coin will be audited and backed by real assets. These precious metals will be housed in warehouses and refineries around the world. Currently, the fund has some $300 million in assets but hopes that moving to a new base of clients with the use of crypto will allow its fund to not only grow in interest, but perhaps become one of the de facto stable currencies pinned to commodities in the crypto-space.
Recently we have seen a surge of cryptocurrencies backed by real-world products in the past year or so. This is because tokenizing a real-world asset or product has many benefits and allows us to properly track their movement and value. For example, the Australian-based project PowerLedger does the same with power and solar energy.
However, Tiberius Group is not even the first project creating a metal-backed coin. The Russian giant Goldmint and Singapore’s DigixGlobal are similar concepts which are both tied to non-industrial metals. Overall, as the crypto market continues to expand and eventually grows in forming the foundation of the Web 3.0, these basic ‘stable coins’ will reflect the prices of real-world assets.
What differentiates Tiberius Group is that ultimately it is a longstanding fund and firm with institutional clients, a large investment pool, and an experienced management team. As you might expect, meeting the regulatory framework in Switzerland was the first major step – but that’s already been completed.
Ultimately, the developments of metal-backed coins represents a real shift from real-world assets to their tokenization. More and more individuals are seeing bitcoin as the relative index fund of the entire crypto space – and that means that more and more of these funds will inevitably develop over time as the crypto space becomes more dominant. The development of a metal-based fund will ultimately be necessary, to demonstrate the real value behind these housed metals, but the stability of these prices in the long-term must first be established before we can speak of their legitimacy in this still-young crypto market.