The London Metal Exchange (LME) is exploring a new way to help metals companies access loans by turning warehouse stocks into digital tokens. The plan focuses on metals stored in Hong Kong that lack standard trading documents.
Meanwhile, this could let companies access financing without selling their stored inventory.
The LME is in early discussions to tokenize metals held in its Hong Kong warehouses. The plan focuses on off-warrant stocks, including metals such as copper and aluminium that are not covered by the exchange’s standard warehouse warrants.
Without the standard documents, companies may find it harder to use their stored metals as loan collateral.
Meanwhile, tokenization could help by creating digital records linked to the physical metal, making it easier for lenders to check the assets and consider them for financing.
However, the plan does not cover metal already backed by LME warrants, which already have established documents for trading and financing.
LME Plans Industry Talks in November
The exchange is preparing an invitation-only industry roundtable in early November to discuss the proposal with banks, metals traders and warehouse operators.
Their input will help assess how tokenized metal stocks could work in practice and what safeguards may be needed.
The LME has not announced a launch date or confirmed which technology it would use.
Asia Advances Tokenization as U.S. Platform Faces Pushback
Meanwhile, the London Metal Exchange (LME), which handles around $21 trillion in annual trading, is exploring tokenization to help companies use metal stocks in Hong Kong to secure financing.
On the flip side, OKX and Intercontinental Exchange’s (ICE) planned tokenized stock platform is facing growing opposition. As 33 companies have objected to the plan, including JPMorgan Chase, AMD, Adobe, Dell and Coca-Cola. They joined earlier objectors such as Microsoft, Alphabet and Goldman Sachs, whose combined market value is about $17 trillion.
The platform could still move forward, but the growing list of objections may limit the number of stocks available for trading at launch.
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