The shipping agency that struck the first freight deal settled in bitcoin is now seeking US$150 million to launch its own cryptocurrency.
Prime Shipping Foundation, a partnership between Gibraltar-based Quorum Capital Ltd and ship broker Interchart LLC, is looking to raise the funds by midyear in a so-called “initial coin offering.”
Using its own cryptocurrency would ease conversions into and out of traditional currencies, speeding settlement, chief executive officer Ivan Vikulov said.
Photo: Bloomberg
The company was the first to execute a freight deal in bitcoin, shipping 3,000 tonnes of Russian wheat to Turkey at the end of last year.
While the freight charges were billed in the cryptocurrency, using digital coins to pay for the actual commodities has proven to be difficult.
That is because their lack of liquidity makes it harder to convert higher-value deals quickly into fiat currencies, he said.
“The conversion in and out of bitcoin can sometimes take one or two days, and that’s not fast enough,” Vikulov said. “Ours will take a few seconds.”
Half of the funds the firm intends to raise are to be used to provide liquidity to the company’s planned Prime Crypto Bank, which would allow almost instant conversion from cryptocurrencies, Prime Shipping said in a statement.
The firm is in talks with auditing firms to oversee the initial coin offering and aims to get a banking license in Gibraltar, one of the most cryptofriendly jurisdictions.
Cryptocurrency transactions are part of Prime Shipping’s blockchain payment system for bulk commodities.
The digital ledger-based technology is gaining traction in agricultural markets, with Louis Dreyfus Co, one of the world’s largest foodstuffs traders, earlier this year announcing that it had struck the first farm commodity trade to use blockchain.
The 166-year-old trading house used the technology to sell a cargo of US soybeans to China’s Shandong Bohi Industry Co (山東渤海實業).
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