The UK Introduces The First Oil-Backed Cryptocurrency

Bilur is a new Ethereum-based cryptocurrency that seeks to compete with industry-leading cryptocurrencies like bitcoin.

A new Ethereum-based cryptocurrency has hit the market that secures its value to oil, a first for the digital money sector. The currency called ‘Bilur’ (Basque for ‘chain’) was created by London-based financial services company R FinTech to compete with other industry leading cryptocurrencies like bitcoin. Ignacio Ozcariz, CEO of R FinTech, tells ETHNews that the concept of monetizing the energy sector has been long overdue.

“Crude Oil and its derivatives, gasoline; gasoil; and its closest associate, natural gas, have been running the last wave of the industrial revolution from the last part of the 19th century. All of them are primary energy vectors that, jointly with the flow of energy in the form of electricity, have driven the unstoppable 20th-century technological revolution. So why not consider the energy as the new monetary standard, as it is the base for the technological economic world.”
Initially, the company, which plans to turn profits through a small three-percent-per-year management fee, has valued one Bilur to be equivalent to 6.481 barrels or one ton of Brent crude oil – roughly $356. According to the Bilur website, this price is calculated daily against the Standard & Poor’s Platts Dated Brent assessment – the benchmark appraisal of physical cargoes of crude oil in the North Sea.

It has also been reported that Texas-based Oil Company Hockley has contributed one million barrels as collateral to secure the currency “but has told R FinTech it can ramp up if Bilur becomes popular.” According to Ozcariz, these barrels have been divvied into a finite number of units in which those seeking investment opportunities in physical energy can readily capitalize upon.

“Bilur, as of today, has been issued in 154,297 units with these 1 one million barrels as subjacent. Of course, new addition of Barrels will support new issues of Bilur,” said Ozcariz.

Bilur is aimed at investors looking to capitalize on cryptocurrencies but prefer capital that is supported by fixed assets. Ozcariz tells ETHNews that, due to legal restrictions, this concept has been a couple of years in the making.

“Bilur as a concept is two years old. The issue was to achieve the securitization of energy commodities that are subjacent of the Bilur and that [securitization] is the real breakthrough of R FinTech. The legal and commercial constraints that, until now, restrained the use of energy commodities as financial instruments have taken these two years for R FinTech to arrive at the current structure.”
Over the past year, commodity-backed cryptocurrencies (particularly gold) have become increasingly popular; the latest debuting in April when the UK Royal Mint revealed plans for the Royal Mint Gold (RMG) token.