CurioInvest And MERJ Introduce Token Pegged to Luxury Cars

On January 30, investment platform CurioInvest and Seychelles-based digital asset exchange MERJ Exchange Limited announced their plans to tokenize luxury cars.

The token, called Car Token (CT1), will be tethered to the value of collectible cars, allowing more people to obtain a portion of an asset, as BNN Bloomberg reported.

Historically safe havens?

The company maintained that the token is attractive due to the fact that the value of such goods is widely appreciated. “When you look at fine art, collectible cars, they have been perceived historically as safe havens,” stated Fernando Verboonen, founder and CEO of CurioInvest.

Verboonen said that those who hold CT1 tokens will get benefits from it, although he did not explain it in detail. CurioInvest’s official website indicates that token holders are able to get a part of a potential profit when the car is resold, and the amount of money they get is correlated with the value of the vehicle.

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

Although the token is pegged to the value of classic cars, CurioInvest said that it is not considered as stablecoin, but rather a security token, as it allows to comply with the Financial Market Authority approved Prospectus and International Securities Identification Number.

You can’t drive the cars

Jim Needham, head of digital strategy at MERJ, further stated: “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, it does not mean that Ugandan investor will have the right to drive the car he invested in.

When asked what will drive people to invest in tokenized luxury cars, and what could be the motivation behind it, CurioInvest said that individuals can invest in several cars, thus investing “in the virtual garage of your dreams, backed by tangible, real-world assets.”

In future CurioInvest plans to allow investors to watch their cars with webcams, visit them periodically and take part in driving events involving similar cars.

Tokenized luxury cars and depreciation

Dwelling on the way depreciation could affect the value of the token, CurioInvest stated that any kinds of investment may be considered risky. The company added that cars are real assets, which may be subject to material risks like potential vehicle damage, adding:

“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.”

Several other car manufacturers also adopted blockchain for classic cars. For instance, Italian luxury sports car brand Lamborghini implemented Salesforce Blockchain to authenticate heritage Lamborghini cars. The platform allows the company to trace, certify and authenticate heritage cars in faster and safer way with the blockchain platform.