2017 has brought us a wave of cryptocurrencies backed by real world assets, such as cryptos backed by gold, diamonds, and even milk farms. A new project led by a team that includes Commissioner Bart Chilton of the U.S. Commodity Futures Trading Commission, however, is aiming to create the world’s first legally compliant oil-backed cryptocurrency.
OilCoin is a new cryptocurrency that is focused on tokenizing barrels of oil held in reserve. Each OilCoin will represent one barrel of oil, and is intended to provide investors with a meaningful and provable crypto that is less susceptible to the innate volatility of the cryptocurrency market. The OilCoin initial coin offering is set to launch in the first quarter of 2018.
The development of the OilCoin project has been performed under the close supervision of U.S. Commodity Futures Trading Commission veteran Bart Chilton, and complies with United States regulations and laws concerning securities offerings.
The SEC has recently stepped up efforts to address the growing initial coin offering ecosystem, placing halts on the operation of platforms such as the Munchee ICO and pursuing legal action against the creators of the PlexCoin project. A new cryptocurrency that conforms to SEC guidelines is thus a promising prospect to initial coin offering investors
Chilton, who worked with the SEC for more than seven years, has been an active voice within the cryptocurrency community and was one of the first US government officials to call for increased regulation of digital currencies.
What Is OilCoin?
OilCoin is aiming to digitize the $1.7 trillion global oil market. Oil is the single largest and most commonly traded commodity in the world- the oil market is larger than the GDP of all but 10 of the most wealthy countries globally.
OilCoin co-founder Darius Brooks has commented on the benefits of the OilCoin investment:
The price of an OilCoin token will approximate and move in tandem with the price of a single barrel of crude oil. As demand for OilCoin causes the price of a single OilCoin to rise above the price of a barrel of oil, additional OilCoin will be issued and the proceeds will be invested in additional oil reserves,”
In addition to working with the SEC, the OilCoin development team is also working closely with both domestic and global in an attempt to ensure that OilCoin is one of the most trusted and stable cryptos in the world. Daniel Eisner, a member of the OilCoin leadership team, commented on the importance of regulatory compliance in a press release published on the 11th of December:
“The creation of an intrinsically valuable digital currency coupled with strict compliance with U.S. securities and commodities laws positions OilCoin to set a new standard for the structure, issuance, transparency and global use of peer-to-peer transferable tokenized value. OilCoin addresses the fundamental criticisms of cryptocurrencies by leading figures in finance, commerce and government regulation.”
The OilCoin ICO
OilCoin tokens will be issued on the Ethereum blockchain via the ERC20 protocol. Each OilCoin token will be supported by the rights to a single reserve barrel of oil on a one-to-one basis. OilCoin have stated that oil barrel reserves will be audited by the SEC and published on the SEC website.
There are currently no specific details regarding the price of OilCoin tokens, but as the ICO draws nearer it’s likely that OilCoin will release comprehensive ICO information.
OilCoin is set to become one of the very first fully-compliant digital currencies backed by highly valuable real-world assets. If you're interested in keeping up to date on the OilCoin project, it’s possible to sign up for email updates via the OilCoin website.