Oil-Backed Certificate of Deposit Unveiled

Iran Energy Exchange launched a new financial instrument on Sunday enabling investors to buy securities with crude oil and gas condensates as underlying assets. 
“The so-called oil-backed certificates of deposit offer a new and innovative investment tool. Holders of the certificates will be the owners of physical crude oil. The certificates provide a new investment opportunity for investors to buy black gold rather than traditional assets such as gold and forex,” said Mohsen Khajeh Mehr, CEO of the National Iranian Oil Company, SENA reported. 
The secondary market for the certificates has been launched can be guaranteed by banks. “Despite being denominated in US dollars, they are convertible into rials upon investors’ request,” Khajeh Mehr said.
A commodity CD is a security indicating ownership of the holder on a particular amount of a commodity supported by a standard warehouse receipt issued by the warehouse and certified by the Securities and Exchange Organization, the domestic capital market regulator.