The future of commodity trading will be digital on the blockchain, here's how - Atomyze CEO
(Kitco News) - With the advent of blockchain technology, it is now possibleto "tokenize" assets and create digital trading vehicles that trackthe underlying asset.
Atomyze is one such company doing exactly that, and thefirst asset class they are tokenizing will be commodities, and in particular,metals.
Jeanine Hightower-Sellitto, CEO of Atoymze, discusses withDavid Lin, anchor for Kitco News, how tokenization works, and the the benefitsof using this technology over legacy trading vehicles, like futures contracts.
"The idea here is that we're bringing efficiency toownership physical materials, so rather than having to go through the logisticsof buying spot material on the open market, the OTC market, deal with logisticsto ship it and store it, getting your own storage facility for it, you canactually own physical material through digital title," she said.
The digitized tokens, aimed at institutional investors, canfurther be fractionalized.
"You can buy anything down to 1/100th of an ounceof palladium on the platform, so we actually have been very careful toconstruct the product to meet all the regulatory standards in terms ofdelivery. The metal is fully redeemable, so if you wanted to take the metal outof the vault, you can hit a button on the platform and redeem it, and have themetal be shipped to you," Hightower-Sellitto.
Hightower-Sellitto's comments come as base metals haverallied last year and into 2021, with copper climbing from $2 a pound from itslows in March, 2020, to $4.37 a pound today.
Palladium has also rallied, but has since pulled back fromits highs in May.
For more information on Atomyze and why the marketcontinues to see price strength in raw commodities, watch the video above.
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By David LinFor Kitco News
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dlin@kitco.comwww.kitco.com