Metals.io has launched 25,000 xCu tokens, each backed by one kilogram of refined copper stored in Hamburg, Germany. The initial batch is worth about $366,000, and the company hopes to grow the offering to millions of dollars depending on investor demand.
Metals.io launched 25,000 copper tokens, known as xCu, each backed by one kilogram of refined metal. The initial batch, equal to 25 tonnes, is worth about $366,000.
The company is deliberately starting small. Ben Elvidge, head of alternative assets at Trilitech, the Tezos development company behind the platform, said the aim is to reach millions of dollars while building sustainably.
How xCu gives buyers physical copper
Unlike copper mining shares or futures contracts, xCu gives buyers ownership of physical copper already held in storage. Elvidge told CoinDesk the tokens trade around the clock with no minimum investment.
According to Elvidge: "This is real, physical, refined copper", not unmined copper or concentrate still in the ground.
Holders can redeem tokens for physical copper if they have a suitable storage account and pass identity and anti-money laundering checks. Each sheet of refined copper weighs approximately 125 kilograms, which sets the minimum for physical redemption, Elvidge said.
Archax checks the copper against token supply
Archax, a regulated digital asset platform based in the U.K., acts as trustee and checks that the copper held matches the circulating token supply. Crypto Briefing reports that the token runs on Etherlink, an application built on the Tezos blockchain.
The platform's tokenization of metals did not start with copper. Metals.io already trades five other tokenized metals products, and uranium leads with a market capitalization of about $9.2 million, followed by gold at $4.1 million.
Copper demand is expected to grow
Copper demand is expected to grow as power grids, electric vehicles and AI data centers expand. S&P Global projects global demand could rise 50% by 2040.
Tokenized metals are not new, since Tether's XAUT and Paxos' PAXG already offer tokens backed by physical gold. However, copper remains a much smaller market for blockchain-based investment products. Elvidge said Metals' future issuance will depend on how much demand the company finds among investors.
Sources: CoinDesk, Crypto Briefing
Trading involves risk.
Risk Disclaimer
