The shipping agency that struck the first freight deal settled in Bitcoin is now seeking $150 million to launch its own cryptocurrency.
Prime Shipping Foundation, a partnership between Gibraltar-based Quorum Capital and ship broker Interchart, 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, according to Chief Executive Officer Ivan Vikulov.
The company was the first to execute a freight deal in Bitcoin, shipping 3,000 tons 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’s 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 will be used to provide liquidity to the company’s planned Prime Crypto Bank, which will allow almost instant conversion from cryptocurrencies, Prime Shipping Foundation said in a statement provided to Bloomberg. The company is currently in talks with auditing firms to oversee the ICO and seeking to get a banking license in Gibraltar, one of the most crypto-friendly jurisdictions.
Cryptocurrency transactions are part of Prime Shipping Foundation’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, announcing earlier this year 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.
© 2018 Bloomberg