Russian miner debuts digital tokens for diversified metals basket

Russian miner debuts digital tokens for diversified metals basket

Russia’s nickel and palladium miner Nornickel, through its digital arm GPF Investments, has launched a new type of digital financial asset (DFA) on the Atomyze blockchain platform. This financial product encompasses a diverse basket of metals, including gold, palladium, platinum, copper, and nickel, the miner said in its press release.

Based in the resource-rich Arctic region of Russia, Nornickel aims to tap into the burgeoning market of digital investments and meet the rising demand among retail investors for innovative financial products.

The new token offers investors a blend of risk and return by aggregating a selection of metals crucial for various sectors, the company said. The token value is based on a formula linked to current quotes on the London Bullion Market Association (LBMA) and the London Metal Exchange (LME).

In late 2023, Nornickel, majority owned by Russian investment vehicle Interros and aluminum monopoly Rusal, issued tokens linked to the prices of platinum group metals such as palladium, platinum, iridium and ruthenium. Nornickel is the world’s largest supplier of palladium and refined nickel.

All issues have so far been targeted to selected qualified investors. The miner earlier said that after several trial issues the new type of digital products will be available to a wider range of wallets.

Given historically low correlation between metal prices and stock market fluctuations, this new digital asset aims to serve as a resilient investment option amidst macroeconomic volatility, the company said.

Vladimir Pronsky, CEO of GPF Investments, highlighted the uniqueness of this DFA for the Russian market, emphasizing Nornickel’s commitment to innovation and the private investment sector in Russia. He suggested that in times of economic uncertainty, such digital products could represent the future’s “safe haven.”

Alexey Ilyasov, CEO of Atomyze, adds that this tokenized basket of metals offers investors protection against short-term market shifts by diversifying across several commodities.

The DFA has an issue volume of 11 million rubles and a one-year circulation period, featuring two early redemption options to capitalize on favorable metal prices. Pricing for each DFA unit mirrors the evening prices from LBMA and LME, with conversions into rubles based on the Bank of Russia’s official exchange rate.

To ensure the backing of these digital assets, GPF Investments secures an equivalent amount of the respective metals upon issuing the financial instruments. Targeted at qualified investors, these DFAs are available on the Atomyze platform, regulated by the Central Bank of Russia under federal law No. 259.

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