Russian Metal Giants Tokenization Firm Expands to America

Saturday 17 October 2020, 4:39 AM AEST - 1 week ago


Atomyze, a tokenization startup by Russian mining and smelting giant Nornickel, is setting up shop in Greenwich, Conn., to sell tokenized metals in the U.S.

The company, whose legal name is Atomyze LLC, will become the second foothold for Nornickels tokenization ambitions. It will work in parallel another entity that will tokenize Nornickels metals, Tokentrust, which was launched in February in Switzerland. Atomyze does not currently have a presence in Russia.

There are two use cases for metal-backed tokens, Nornickel CEO Vladimir Potanin told CoinDesk last year. First, industrial producers can use such tokens to flexibly modify their contracts for the delivery of the actual metals.

Second, people interested in investing in the metal industry might use the tokens to bet on the prices of metals such as palladium, copper or nickel, instead of buying stock in companies like Nornickel.

Both Atomyze and Tokentrust will use a Hyperledger Fabric-powered backend coded by Nornickels engineers together with IBM, and will issue tokens backed by the mining giants inventory. Legally, however, their operations will be separated, as each company will only serve users in the country in which it is based – at least initially.

Nornickel did not respond to questions as to why the U.S. and Switzerland will be the first two markets for Atomyze by press time. The large U.S. market has been lucrative for financial service firms in general, even though there can be regulatory hurdles.

In Russia, meanwhile, the regulatory situation is getting clearer. This summer, a new law regulating digital asset issuance was passed, and starting in January issuers registered with the Bank of Russia will be able to launch tokens in a centralized, permissioned way.

Due to the regulatory differences in Switzerland and the U.S., the two firms will be issuing two distinct sets of tokens. At least in the initial phase, these tokens will not be interchangeable, said Jeanine Hightower-Sellitto, CEO of Atomyze LLC. ...

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