Prime Shipping Foundation is looking to raise approximately $150 million to assist in the launching of its own virtual currency. This follows a freight deal the shipping agency struck and which was the first to be settled in Bitcoin (BTC).

The shipping agency, which was formed out of a partnership between Interchart LLC, a ship broker, and Quorum Capital Ltd, a Gibraltar-based firm, is targeting to launch the initial coin offering mid this year. According to the chief executive officer of Prime Shipping Foundation, Ivan Vikulov, the reason for opting to use its own virtual currency was because it will ease conversions out of and into fiat currencies and this will enhance the speed of settlement.

Lack of liquidity

Towards the close of last year Prime Shipping Foundation became the first company to carry out a freight deal which was settled in Bitcoin by shipping approximately 3,000 tons of wheat from Russia to Turkey. Though the freight charges were in Bitcoins, using virtual currencies to settle payments for the commodities has turned out to be difficult. This is because they lack liquidity and thus converting higher-value deals fast into traditional currencies has proved hard.

“The conversion in and out of Bitcoin can sometimes take one or two days, and that’s not fast enough. Ours will take a few seconds,” said Vikulov.

In a statement Prime Shipping Foundation indicated that about 50% of the funds that will be raised will be set aside to offer liquidity to the firm’s planned financial institution, Prime Crypto Bank. The responsibility of the planned institution will be to allow the instant conversion of virtual currencies.

Initial Coin Offering

At the moment Prime Shipping Foundation is in discussions with auditing firms with a view to overseeing the initial coin offering. The shipping agency also intends to obtain a Gibraltar banking license. Gibraltar has emerged as one of friendliest jurisdictions with regards to virtual currencies.

Transactions in virtual currencies are part of the blockchain-based payment system that Prime Shipping Foundation uses for bulk commodities. Distributed ledger technology is becoming popular in agricultural markets with one of the largest foodstuffs traders in the world, Louis Dreyfus Co, piloting the technology earlier this year.