(Kitco News) – With the advent of blockchain technology, it is now possible to “tokenize” assets and create digital trading vehicles that track the underlying asset.
Atomyze is one such company doing exactly that, and the first asset class they are tokenizing will be commodities, and in particular, metals.
Jeanine Hightower-Sellitto, CEO of Atoymze, discusses with David Lin, anchor for Kitco News, how tokenization works, and the the benefits of using this technology over legacy trading vehicles, like futures contracts.
“The idea here is that we’re bringing efficiency to ownership physical materials, so rather than having to go through the logistics of buying spot material on the open market, the OTC market, deal with logistics to ship it and store it, getting your own storage facility for it, you can actually own physical material through digital title,” she said.
The digitized tokens, aimed at institutional investors, can further be fractionalized.
“You can buy anything down to 1/100th of an ounce of palladium on the platform, so we actually have been very careful to construct the product to meet all the regulatory standards in terms of delivery. The metal is fully redeemable, so if you wanted to take the metal out of the vault, you can hit a button on the platform and redeem it, and have the metal be shipped to you,” Hightower-Sellitto.
Hightower-Sellitto’s comments come as base metals have rallied last year and into 2021, with copper climbing from $2 a pound from its lows in March, 2020, to $4.37 a pound today.
Palladium has also rallied, but has since pulled back from its highs in May.
For more information on Atomyze and why the market continues to see price strength in raw commodities, watch the video above.
Follow David Lin on Twitter: @davidlin_TV
Follow Kitco News on Twitter: @KitcoNewsNOW
…
