Geneva — A new virtual currency launched on Tuesday aims to rival industry leader bitcoin by pegging its value to oil assets, a first in the rapidly growing digital money sector.
The currency called "bilur" and created by London-based financial services company R Fintech uses the technology pioneered by bitcoin, while trying to offer an alternative for those weary of the wild fluctuations that have plagued digital currencies. "This is the first crypto-currency with a real value," R Fintech’s CEO, Ignacio M Ozcariz, told reporters in Geneva.
To start, the company has valued one bilur as equivalent to 6.5 barrels of Brent crude oil, making it an asset worth $356 (€326). Texas-based oil company Hockley has initially set aside 1-million barrels of crude as collateral to underpin the currency, but has told R Fintech it can ramp up if bilur becomes popular.
Like bitcoin, bilur is run with so-called blockchain technology, in which encrypted digital coins are created by super-computers, regulated and controlled by a community of users who try to guard against counterfeiting.
Bitcoin was the world’s top performing currency in 2016 and continues to hover around record highs of $1,400, after being worth just a few cents when it launched in 2009. It has appealed to those interested in bank-free transactions and drawn to money not controlled by a government or central bank. But detractors have suggested that bitcoin could ultimately be undermined by its volatility, noting that the currency dramatically lost 75% of its value in 2013.
Bilur is targeting those who like aspects of virtual currency trading but would prefer funds supported by a fixed asset — similar to a gold standard for traditional currencies. "We’re still a crypto-currency, we’re just backing it up with a real physical thing," said Usama al Ali, an IT specialist at R Fintech. With the project in its infancy, there are no merchants accepting bilur as a valid form of payment.
Bitcoin is, in contrast, increasingly accepted by merchants worldwide. R Fintech said it aims to make money through a small management fee, charging bilur holders roughly 3% per year. The name "bilur" is the Basque language word for "chain", a nod to blockchain technology.
AFP
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