Nornickel to Issue Crypto Tokens for Palladium Trading

Nornickel to Issue Crypto Tokens for Palladium Trading

by April 2, 2019
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The world’s largest high-grade nickel and palladium producer is developing a digital platform for palladium trading.

The CEO of Norilsk Nickel – Vladimir Potanin announced several digital platforms including those that use crypto tokens for palladium trading.

Vladimir Potanin

Vladimir Potanin

Nornickel negotiates with Swiss authorities about issuing tokens by its Switzerland-based palladium fund and may eventually expand the concept (apply the same practice) to other metals”

said Vladimir Potanin to Bloomberg.

Potanin is a chief executive officer and owns about a third of the world’s leading palladium mines. He said that the idea was welcomed and acknowledged by customers and there is a high demand for tokens backed by metal.

“Transactions in tokens are simpler and more convenient,”

he said, adding that Nornickel may start the digital platform by the year-end if the project is approved legally.

Also, Potanin negotiated with lawmakers and the central bank to create further frameworks for regulating digital platforms. New Russian laws that regulate digital finance are also critical success factors.

The company is a pioneer of such initiatives. That means that the legal risks can be hardly forecasted. There are chances that the process will be initiated in Russia, as the law on digital financial assets is actively discussed and processed” said Russian investment analyst Vadim Kravchuk.

«In Nornickel’s case it is important to remember the eternal confrontation amongst the shareholders of the company. It is Potanin who would like to invest part of the dividends in boosting Nornickel’s output of palladium and other metals and the miner’s other key shareholder – Oleg Deripaska’s Rusal company which uses the payouts to service its debt»

said Sergey Sidilev, a Russian market expert.

Nornickel’s plans to boost output of metals, including palladium, will require annual investments of $2.3 billion to $2.6 billion through 2022. “The company has big plans,” Potanin said. “Given the need for investment, the dividend should be revised downwards.”

Potanin’s plan is a credible way to support the company’s stability and the demand for its products. They may also have a positive impact on the Russian economy and suggest a new global cooperation tool between the producers and consumers.

Nornickel is also developing a digital platform for intellectual property, where startups can offer their ideas, even to industrial companies. Starting all the platforms would cost Nornickel and Potanin $5 million to $6 million.

 

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Please note this is not investment advice.

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