Liechtenstein-Based Startup to Issue Tokens Pegged to Value of Collectible Cars

Investment platform CurioInvest and Seychelles-based digital asset exchange MERJ Exchange Ltd. will jointly begin offering a token backed by collector luxury cars.

The so-called Car Token (CT1) token is set to be pegged to the value of collectible cars giving more people a chance to have a fraction of an asset, BNN Bloomberg reported on Jan. 30.

Historically safe havens?

The company stipulated that the attractiveness of the token also lies in the fact that the value of such goods continues to appreciate. “When you look at fine art, collectible cars, they have been perceived historically as safe havens,” said Fernando Verboonen, founder and CEO of CurioInvest. 

Verboonen added that each holder of CT1 tokens will benefit from holding a fraction of an asset, although did not delve into a detailed explanation at that juncture. CurioInvest’s site specifies that a token owner is able to share in any potential profit when the vehicle is resold, wherein the amount of money they get is directly proportional to the value of the car.

It is also said that “any vehicle that increases in value by more than 20% will be resold by CurioInvest so that investors can share in the profits.” As such, the partners are planning to list 500 collectible cars on the exchange worth over $200 million.

Although the token is backed by the value of classic cars, CurioInvest told Cointelegraph that it does not consider it a stablecoin but rather a security token as it comes with and by the Financial Market Authority approved Prospectus and International Securities Identification Number.

No right to drive the cars

Jim Needham, head of digital strategy at MERJ, further said: “You can have a guy in Uganda who’s able to invest in a rare car that’s kept in a vault in Stuttgart, tokenized by a company in Liechtenstein and it all fits within this recognized regulatory environment.” However, that Ugandan investor will hardly be able to drive the car he invested in..

When asked what would push people to hold such tokens and what would be the impetus behind it, CurioInvest said that individuals can invest in multiple cars and thus “invest in the virtual garage of your dreams, backed by tangible, real-world assets.”

For the future, CurioInvest plans to allow investors to monitor their vehicles via webcam, occasionally visit the vehicles, and participate in driving experiences involving similar cars.

What about depreciation?

Considering the way depreciation could affect the token value, CurioInvest pointed out that all forms of investment are vulnerable to risks. The company also noted that cars are real assets, which may be subject to material risks such as potential vehicle damage, and added:

“The value of an investment is determined by market forces and thus, it can fluctuate in both directions. You will make a profit if the value of the vehicle exceeds maintenance costs when it is resold by Curio. If you are selling Car Tokens peer-to-peer, there is no guarantee that you will locate a buyer willing to purchase them at your desired price.”

Some other car manufacturers have also embraced blockchain in regard to classic cars. Thus, Italian luxury sports car brand Lamborghini began using Salesforce Blockchain to authenticate heritage Lamborghini cars. The platform enables Lamborghini to trace, certify and authenticate heritage cars faster and more securely using its blockchain platform.