Gulf Energy Exchange launches world’s first oil-backed digital asset
The Gulf Energy Exchange (GEX) has announced the launch of OIL1, described as the world’s first oil-backed digital asset, linking the global energy sector with blockchain-based finance.
Unveiled at the World Economic Forum in Davos, OIL1 is a stablecoin built on U.S.-developed technologies and collateralized by verified reserves of Gulf crude oil, News.Az reports, citing foreign media.
The digital asset is pegged to both the U.S. dollar and the price of Gulf crude, creating a direct bridge between traditional energy commodities and the digital asset economy.
Its backers say the dual-peg structure is intended to enhance transparency and stability, while also offering protection against currency volatility and fluctuations in oil prices. OIL1 is positioned at the intersection of two major markets: the $2.4 trillion global oil market and the rapidly expanding $260 billion stablecoin market.
By tokenizing oil-backed value, the project aims to broaden access to energy assets, lower entry barriers for retail traders through smaller investment denominations, and enable continuous, 24/7 access to the market.
According to its developers, OIL1 will enable programmable, near-instant transfers and on-chain settlement, features intended to support faster and more frictionless global oil trading. The model is expected to open global access to energy-backed financial instruments while accelerating how oil-linked value is exchanged across borders. OIL1 will be issued by the Gulf Energy Exchange (GEX), which is based in Bahrain and will be subject to regulatory approval by the Central Bank of the Kingdom of Bahrain. To support liquidity and resilience, the digital asset will be backed by a diversified reserve basket that includes USDC and USD1.
The infrastructure behind OIL1 is built on Arc, an open Layer-1 blockchain developed by Circle. It will be secured using Microsoft’s enterprise-grade cloud architecture, with managed security services provided by ITC Secure, a Microsoft Gold cybersecurity partner.
“OIL1 combines the stability of the US dollar — long the world’s most trusted reserve currency — with the intrinsic value of the Gulf’s most strategic natural resources. By bridging traditional energy assets with blockchain-based finance, we are creating a secure, transparent, and globally trusted currency for the energy age as an instrument of energy security,” said Andre Pienaar, the Chief Executive of C5 Capital.
Circle’s Chief Business Officer Kash Razzaghi said the initiative reflects the next phase of integrating digital finance into the world’s most important commodity systems, while ITC Secure CEO Arno Robbertse called the launch a landmark moment in the convergence of energy markets and digital finance, emphasizing the importance of security and resilience from the outset.
By Nijat Babayev
Similar news
