Switzerland-based commodities fund Tiberius Group is preparing to launch what will likely be the world’s first cryptocurrency backed by physical metals. We spent some time with CEO Christoph Eibl to learn more.
Tiberius Group is preparing to launch its first digital coin, with the initial coin offering (ICO) set to start with a preliminary phase in the coming weeks, and the full launch likely to be made this summer. Cryptocurrencies have grown sharply in popularity in recent years, with many ICOs being made, but the Tiberius Coin will differ from most in two respects – it will be backed by physical commodities rather than being of emblematic value, and it is likely to be the first such currency to be underpinned by industrial metals. The metals will be gathered in three sub-baskets – one containing metals relating to electric vehicle (EV) production, one containing metals used in technology and robotics and a third featuring precious or ‘stability’ metals.
Human Capital Insider (HCI): The cryptocurrency industry seems to be a very busy place right now. What’s different about the Tiberius ICO?
Christoph Eibl (CE): What’s different here is that as an established player we give the whole cryptocurrency situation a different credibility. I say that in the context of some of the things that happen in the space – I mean, some ICO companies simply seem designed to take advantage of investors. Another factor is that the majority of what’s being traded in the crypto space is intangible – you’re just trading prime numbers and code, so there’s no tangible value there. If we were to ask what’s behind this $900bn industry, the answer would be nothing but people portraying value in digital contracts. Tiberius is enabling a new compartment in the crypto space. That compartment won’t appeal to everyone, but there will be those who say, “I like the technology, I like the blockchain, but I like the idea of using a digital currency that’s backed by something real”. Those are the people we want to address.
HCI: The increased activity in cryptocurrencies tends to be pinned on the possibility of fast returns and a desire to opt out of government-run money. What would you say is the driver?
CE: One of the core reasons is that the technology that a lot of these currencies offer is ground-breaking. Investors want to be linked to the latest trend, to something linked to the future. For instance, why would an investor buy an EV product? Because they believe that going forward people will buy electric cars. People are buying into crypto because they believe that in the future people will use those currencies. A second reason is that there is a group of people who clearly want to stay out of the ‘old economy’ and its regulations, banking and fiat currencies. A third group of investors is of the speculative kind – they just want to participate in anything that’s hot. You see them in any product market, whether it’s biotech, commodities or cryptocurrencies. There are other drivers, but these three are the keys right now.
HCI: How are you approaching regulation?
CE: The difference between us and 99pc of ICO companies out there is that we’re a group of businesses that are already regulated. Our asset management business is regulated by Finma here in Swizerland, BaFin in Germany and the SEC in the US, so we’re familiar and comfortable with what regulation entails. For us, it’s more of a question of whether we want to upgrade our current regulatory status or amend it to some degree, or are we perfectly fine to go live tomorrow? This is what we’re finalising at the moment.
HCI: You have been quoted elsewhere as saying that the crypto market coming under tight regulatory scrutiny could represent an opportunity for Tiberius Coin, as it is backed by physical commodities. Should we be expecting a regulatory crackdown in the near future?
CE: I think it’s a given. It’s clear that cryptocurrency is not the one-day phenomenon that people were expecting a few years back. At $900bn heavy, it’s fully established – it’s on Bloomberg all day long, all over the news, connected to all kinds of trading operations, so regulators around the world are scratching their heads as we speak. They don’t know how to regulate the industry yet, but I think that over the next 12 months some of them will present clear plans. This will cause ICO companies that have cut corners to basically blow up. That’s also a given. So far, nobody has told these companies what they can and can’t do. It’s therefore probably smarter to address all potential regulatory angles up front.
Whether you securitise a commodity or a digital value, the regulators see this as falling under securities law, and issuers will have to come up with the proper paperwork and clearances. The question of who is a securities dealer and should therefore be regulated is still being asked. Soon that question will be answered and only those who followed the clean path to regulation will survive. We want to be running with the pack that survives – and ideally leading the pack when it comes to regulation in the field of asset-backed cryptocurrencies. We’re looking at securities law very intensively right now and will try to comply wherever possible.