PetroDollars, launched by New York-based Signal Capital Management, allows individuals and organizations to use a peer-to-peer exchanged digital currency that's backed by the value of crude oil and natural gas, announced Monday it will hold an initial coin offering of up to $700 million later this year.
What It Is
Each PetroDollar will represent the net recovered value of a minimum of 10 recoverable reserve barrel of crude oil or the natural gas equivalent, according to the crypto's white paper. It will be supported by a basket of oil and gas assets, including:
- Physical oil and natural gas.
- Oil and gas futures or derivatives.
- Interest in oil-producing properties.
The amount of tokens to be issued is capped at 500 million, 450 million of which are to be retained for future issuances and sales, according to Signal Capital Management. About 25 million has been issued to an affiliated oil and gas company, which will sell tokens in both the PCP and ICO market to raise money for developing the oil and gas reserves that back the PetroDollars.
PetroDollars will be supported by the blockchain platform and use Ethereum's services to facilitate transactions with both fiat currencies and cryptocurrencies.
Why It's Important
The regulatory compliant private placement of PetroDollars to accredited investors and foreign investors is underway, Signal Capital Management said. The coins are priced at a discount to the planned ICO price.
"PetroDollars represents a unique opportunity to invest, use, and trade with a virtual currency backed by physical and easily definable assets, rather than thin air and promising ideas," the firm said.
The company expects to launch a follow-on global ICO in late 2018. Signal Capital said it's exploring the creation of a true cryptocurrency bank to service PetroDollars token holders while also discharging traditional banking functions.
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