Monty C. M. Metzger

[audience applauding] We have a problem. You all know we need to mine more commodities in the next couple of years than ever before, and especially copper. I call this the copper crunch, because we need to mine more copper in the next 20 years than in the last 10,000. And every technology age has its defining metal. And now, we are in the AI age. So we need for AI data centers, defense tech, for critical infrastructure and electric grid, more copper than ever before. Just for one data center, for example, for one megawatt, we need up to 40 or 50 tons per copper to build that. So the demand belongs to the future, but the mine development still belongs to decades.

But the real problem, or if you wanna face the problem, is, are we right? Are we asking the right questions? And I wonder, why does it take 20 years to bring a new mine into production? Why does it take so long? Of course, there’s geological, there’s permitting, construction, and capital. But in the talks we now had here at the Mining Forum Americas, we realized that the financing part and the trading part is something which really is still done like in the past century. It’s a multi-trillion dollar market running on current documents, and this is in the age of everything right now. There’s more than 4 billion trade documents being circled around on DocuSign or PDFs or even fax machines. And there’s a 2.5 trillion trade finance gap.

So we have real goods, real buyers, but no financing or lack of financing because of all the paperwork. It’s slow. So you cannot solve today’s problem with yesterday’s solutions. And it almost feels like you’re all walking backwards into the future. So I’m here to help you turn around and to get a better understanding on what the future might hold. That’s why I wrote a book also, and this is the new release, Tokenization, Capital for Humanity, How Digital Ownership Unlocks the Wealth of the World. And you are special here today because we brought 100 books which are outside as a special pre-print for the Mining Forum America only for you.

So what is the book about? I wanna tell you about a special habit I have. I like to write ideas on napkins, and I did that through my entrepreneurial journey since the nineties. So I started my first company in 1998, an internet company, and I sketched this idea on my napkin. And I kept repeating that time over time. Early 2000, I started a trend and market research company in New York City, which we then scaled to Munich, Beijing, and Tokyo. And this was the time of iMode, the mobile internet, and kind of a new wave of digital, the internet of information. So it was a very interesting time.

I was able to sell the company and become a business angel and investor. I started my own venture capital fund and invested in tech companies in Silicon Valley, but also in Nordics of Germany, of Europe. I’m originally from Germany, so I did look at a lot of things over there as well. But eventually, I wanted to use that knowledge again to build something on my own. So I was triggered to become an entrepreneur again. And I did that.

2018, I started a digital asset company, but I wanted to do it differently. Coming out of the VC space and with banking background, I wanted to do it the legal way. So we put compliance as a first asset. Back then, nobody cared about that. There was Binance and other ones who just ignored our laws. So we were still, and still are, a hidden champion. Nevertheless, the company had been valued at half a billion dollars, but we didn’t raise any equity or investor money. We just had our strong community, our clients, who we focused on.

So now I’m into my next new venture, and that’s Total Finance, where we tokenize commodities. So from the napkins to a book, because sometimes one napkin is not enough, so I put some core napkin strategies into this book, and you will find it all over the book explained also, but mixed up with a lot of personal stories from my entrepreneurial journey. Mentors, partners, friends, or advisors I met on the journey and who advised me on that. So it’s a very personal perspective on my almost three decades of entrepreneurship.

So let’s go to the first napkin. And I have the original ones right here with me. The first one is a definition on tokenization. And it says, “Tokenization is the transformation of ownership into programmable digital assets that can move as freely as information.” And I often said, “Blockchain is to the money what email was to the letter.” And you can also transfer it to your industry. Blockchain is to the mining industry what email was to the letter. It is a new technology where we probably in a few years, we won’t talk about it anymore. It is like HTTPS, the internet protocol. It just works. You don’t care how Wi-Fi or email is actually working. You care that it’s bringing the information over from A to B. And that’s the same case over here with the blockchain.

From the first Bitcoin white paper, 2008 and then 2009, the start of Bitcoin, we had a migration of 17 years. It started with Bitcoin and there’s a friend of mine, advisor Ricardo Salinas, a Mexican billionaire, and owns one of the largest banks in Mexico. He’s a Bitcoin maxi, how you would say. He loves Bitcoin and says Bitcoin is the new gold. He also said fiat is a big fraud. So you can discuss with him and have a discussion if it’s worthy to invest or not. But to be honest, I don’t really care about this. I care about the underlying technology which is then coming in the further years.

So we had Ethereum as a new champion to create smart contracts on the blockchain. And what it means is that you can make things programmable. You can have an escrow smart contract, a programmed escrow account, where it automatically sends you the stablecoin when the ship leaves the port, for example. And then we’ve seen a wave of utility tokens and stablecoins and markets and meta and everything we’re at right now. So Bitcoin made digital ownership possible, but smart contracts made it useful for almost everything else.

And this brings me to my second napkin, which is the three waves of tokenization. So the first two waves move trillions, but the third waves moves the world, and I wanna explain it step by step. The first one is money. Tokenized money, which means US dollar fiat currency digitized as stablecoins, and it’s not small. Here we’re talking about $300 billion currently one-on-one backed in stablecoins. This means the transaction volume is $33 trillion in the last 12 months. That’s more than Visa and Mastercard combined.

And the market share of this 300 billion is roughly shared between a company called Tether. They have the USDT Tether token, and the USDC, that’s a Circle, is the company behind, which is even now a public listed company. So it’s becoming serious. The dollar really didn’t change, but the rates changed. And if you look at their balance sheets and the orders, you see it’s not only backed one-on-one, but even backed, I think, 110%. So as the interest rates are so positive, these companies are some of the most profitable companies in the world right now. Tether made $30 billion in profit, and they’re just a team of less than 200 people. So it’s probably one of the most successful companies in terms of revenues and profits per employee.

And Bill Gates said something smart already in 1993, and he said, “Banking is needed. Banks are not.” You wanna have the digital rails, the service, but you don’t need to waste time talking to your banker.

The second wave is markets. Wall Street is moving on chain. This is ongoing. You’ve seen tokenized stock, tokenized bonds, tokenized treasury markets, and it grew 400% just in tokenized stock in the last year. The New York Stock Exchange is jumping in and launching their own tokenized stock marketplace. So you can see that this is not only startups anymore or technology companies, it is also the incumbents like the New York Stock Exchange who are bold enough. And not even them, even Larry Fink said, “Step two is going to be the tokenization of every financial assets.” They call it RWA, real world assets, but I would rather say it’s a tokenized financial product because the real world asset is the third wave, meta.

What we now see on the blockchain right now is tokenized gold. It had been proven that it works. Physical ownership can live on chain. It’s currently roughly $5 billion worth of gold being tokenized. So you can see the yellow mark over there that says it’s only gold at the moment, and it’s a few experiments. With that, it brings in a trading volume in the last 12 months of roughly $200 billion worth of gold transactions. But if you look at the total addressable market with $25 trillion or more, it is just 0.02% right now. So the opportunities are massive.

And I say tokenization will disrupt commodity markets. And it’s huge. So the projections here for the next couple of years are up to $30 trillion being tokenized. What does it mean? If you look at the cryptocurrency industry and blockchain industry, where I’ve been in now the last 10 years, currently, it’s roughly $2.8 billion. Let’s round it up. $3 trillion is the whole cryptocurrency market. Half of it is Bitcoin. The other half are utility tokens, stablecoins, other things. So compared to this, within the next three to five years, the whole industry will go 10X. And that’s why it is the largest of these three waves.

So wealth is not capital until it can really work. A mountain contains copper as wealth. A verified financial claim turns it into capital. So the greatest opportunity may be converting existing wealth into usable capital. Currently, we see a lot of trapped capital. So that value exists but cannot easily be divided, it cannot move, cannot be financed, programmed, or connect. So here in the mining industry and all of you, you might be sitting on land with tremendous value underneath, but your bankers won’t value it really on your balance sheet because it’s still trapped. So how can the value exist and its ability to move does not? So we built the greatest vault in history, but we forgot to build the door. So the global net worth is roughly $600 trillion and it’s trapped, locked up, and humanity can’t really value it right now.

To unlock it, we use the blockchain and what I call the four freedoms of capital. Number one, it’s access. So capital can be accessed as simple as opening an app. And a good example is if you look as developing countries, they had been jumping over development steps many times. So we all had a pager or a fax machine, but these are technologies which have been replaced and with just WhatsApp or email. And if you look at Africa, Venezuela, or even Argentina, a lot of the population didn’t even know what a fax machine is or a pager. They went from being offline to having a smartphone right away. And all of these people with a smartphone can access a wallet, a digital wallet. They don’t need to have a bank account, and they can access the US dollar. So that’s why the Trump administration loves stable coins because it is selling US Treasuries and US debt to the world basically, making sure that the US dollar stays the global reserve currency. So that’s access.

Movement. It can move at the speed of information. I talked about the internet of information. Now we are in the internet of value. So value can move as fast as sending an email. Form means capital can be new and more useful forms. It can be divisible, it can be programmed, it can be shared, and it can be having smart contract functionalities inside which would enable new functionalities without a trusted counterparty. So you set your terms. It’s locked in an immutable, unchangeable smart contract, and then the rules are set and the contract behaves to it. And last is the less gatekeepers. So imagine having access, movement, and form. It’s natural that we are not depending on so many gatekeepers anymore. So it’s one freedom, four directions, and infinite impact, the four freedoms of capital. So the world does not lack wealth. It lacks usable ownership. And that’s why I wrote a book on how to unlock digital ownership and the wealth of the world.

So how are we going to do that? And brings me to another napkin concept, the mine to market. That’s a circle of tokenization, where we look at the resource, we qualify the reserve, we tokenize the rights and the underlying asset. So with a tokenized commodity, we can make it financiable much earlier, and we can finance production and ultimately bring it to the market immediately, especially now with the copper crunch and the commodity demand. It’s a new way for clients and the industry actually to secure it. And as Total Finance is a US company, we especially look at securing resources now for the US industry who urgently need that. So there’s a movement called the American Dynamism, where the Silicon Valley investors have been now investing into a new form of industrial building, whether it’s ships, defense tech or AI data centers. They are not only doing programming and coding anymore, but building real things. And they think different than your previous client in the past.

So there’s a mining capital paradox. You have three ways to finance your operations. There’s debt, equity or royalty. So in debt, you pay interest rate, you put in a negative side on your balance sheet. You can sell equity, right? Dilute your shareholders, which they’re also not happy with. Or you share royalty streams, so your future revenues with some investors. Now with tokenized commodities, we’re opening up a new financing model for mines to actually finance current production as well as future production. So a mid-sized miner may sit on billions of dollars, proven resources while starving for the mere millions needed to develop it. So the problem is not missing wealth, it’s unusable ownership.

So that’s what we’re building now with Total Finance is build on these three models, the three waves of tokenization, where we tokenize matter, the mine to market model and the four freedoms of capital. And we do this with three first products. Number one is Copper Now, second is Copper in the Future, and then Copper Yield. So Copper Now is one-on-one backed with grade A LME Warehouse receives basically copper sitting in a warehouse in the US, where you have a claim as a digital ownership on your token, and you can redeem it anytime.

The second is Copper in the Future, which is mines which are coming into production, which need capital to actually come into production. We can sell this COP TTR, the reserves right now to clients who want to have certainty to plan. Imagine an AI data center just started to build and dig in the middle of Texas. They wanna know that early spring next year or autumn next year or even in two years, they have the copper capacity on their hands when they need it. So they’re willing to put up the capital right now to buy it and secure it, even if it’s delivered later. So then this Copper in the Future will convert into Copper Now.

And then Copper Yield, very classical product you can imagine. A classic security also. But also interesting because some of the largest crypto companies, I name Ethereum, Cardano, Solana, they’re sitting on large amounts of what they call company reserves or treasuries. So I’ll give you a number. Cardano, for example, they have treasuries of up to $11 billion. And the foundation wants to invest it in the long term, and they’d love to see and invest into something which is on their own blockchain. So that’s why we’re working with Cardano and others to enable that and bring that tokenized commodities on their chain, and they would be interested to invest, whether it’s a yield product or just in the copper itself.

And it feels like we have an Amazon moment. Do you still remember when Jeff Bezos started his online shop? And it was not only about just having a button to click and buy. It did not invent a product. It redesigned the path between the seller and the buyer, and in this case, from the author to the reader. And he cut out a lot of the middlemen. All these distributors, retailers, inventors had been cut out to go directly from the author to the buyer. So it’s about new discovery, it’s about distribution, and about a direct demand. So the winning platform doesn’t need to own the product, it owns the customer relationship and the market access.

And it feels like we have this Amazon moment right now. The mining commodities industry are at the same position like 30 years ago, where we have the producers and the global buyers and capital, and we can connect them with much less middlemen with a system based on stable coins with instant settlement, sending it as fast as sending an email, you’ll get your money. And you can then use the tokens for lending, borrowing, fractionalization, and a lot of other things. So the value moves to the sides of the value chain, and the middle becomes the market.

But there’s a reason why the book is called Capital for Humanity, because with that model, we can actually make sure that the local communities, the local miners who actually do all the hard work, will get more of the revenue share in the future than today. With a direct-to-consumer marketplace, we can basically enable that and make sure that the local resourceful regions can profit and the buyer and the industry can actually get a much better deal with more reliable sources.

To give you an example, a friend of mine, Trey Stevens, founded Anduril. It’s this new drone company, funded by Peter Thiel, Founders Fund, and so on, building defense tech technology. So he complained to me and said, “I have 125 people only to source commodities which we need. It’s a headache. Why don’t we have a store where we can go in, say, ‘I wanna have 1,000 tons of copper next month, next year,’ and plan ahead?” It’s not about money, it’s about the functionality, and he hates how the mining industry currently works. We need to just innovate.

So some of the largest companies do not own the asset. So Uber is the largest taxi company worldwide, doesn’t own cars, right? Airbnb, largest term rental company, doesn’t own any apartments or real estate. Twitter, X, one of the largest news outlets, doesn’t have any journalists. So we are building a similar platform on a commodity market, a digital commodity market. We don’t wanna own the mines, and we don’t wanna operate them. So that’s why we’re here, and we had plenty of discussions over the week, over the last couple of days here to discuss it.

And with our products also now, Copper Now, Copper in the Future, we started to sign miners and warehouses. So we will launch the Copper Now as a new product with the first 1,000 tons in the next couple of months or weeks. So this is roughly 50 million as a first tranche. And then we will also do the Copper in the Future with mines which are coming into production. So from our client perspective, we do have then a hybrid model, right? And we are aiming to tokenize 500,000 tons of copper, which is roughly $6 billion. So it would be a little bit more than what we’ve seen in tokenized gold right now on the blockchain. But as I said, for you, it’s a tiny fraction of what is in the ground.

Another interesting fact is I learned that currently in the warehouses in the US, there’s 250,000 tons of copper available. LME Grade A copper sitting there, either owned by somebody already but ready to redeem. But it’s not enough. We need 10 times more to actually supply the market at the moment. So with that, I would like to close, and I would like to invite you to later get some of these books. I’m happy to sign them and give it to you. It’s a limited amount of books, and I’d like to invite you to the ownership age. Thank you. [clapping]

We’ve got time for questions, Monty, if you’re up for that. Yes. So while we wait for the microphones to circulate, let me ask a question. If I’m a banker looking at this, it looks very threatening to the equity creation and distribution business. How do you see that balance working? If mines are tokenizing their reserves, they are in a sense going to disintermediate the banks. How do you see that balance playing out in future if tokenization takes off?

So the whole industry is maturing. That’s why I’m here with a suit. When I started, I was in a T-shirt, right? Like a tech startup. We’re still a technology company, but our counterpart has changed. So if you speak to Larry Page or Jamie Dimon or all these bankers, they fully understand what we are doing, and including the central banks. Since 10 years they’ve been researching it, and now they’re coming with central bank digital currencies, kind of a new form of a stable coin, right? More controlled. So they have a lot of knowledge, first of all. And second is they know to also support the process. So I don’t see them that we are replacing everything, the current market, but rather to make it more efficient and to use the blockchain as an underlying technology to make this more faster and to bring the mines faster to market.

Thank you. Questions from the floor. Front, Luke. Monty, just a quick question.

Robert Friedland this afternoon spoke to it, so I’d just like your opinion from an asset protection perspective: quantum computing for protecting your token and novation of a transfer. How does that work? Mate, apologies if it’s an ignorant question, but I’d imagine you’d certainly have a view on that.

Can you rephrase the question?

In quantum computing, in and around the advancement of technology and tokenization and asset security.

Yeah. So, Robert Friedland is a character, and I love him with his energy. He’s not stopping. We also sat down together with him for a half an hour meeting, which turned into two hours. So there’s strong interest also from his side. He’s playing with a doomsday scenario, right? Global war, quantum computing, we’re all going to die. It’s not as bad.

Of course, quantum computing is evolving. Nevertheless, the technology as well. We’ve seen what is called a fork, an upgrade. So Ethereum had been doing that several times. Technology evolves, and they’re all pretty much aware about this. Maybe there will be a quantum-powered blockchain as well.

The key critical part about blockchain is if you send a JPEG, a picture, and I send you a photo, you have a copy of that photo, and you can distribute it to your friends. But if I want to send you $10, I don’t want you to have $10 and me, and it’s duplicate, right? So they solved the double spend problem with a distributed database, distributed ledger technology, and this is the revolution. It will work on quantum computing as well. And probably this first generation of blockchain will die. Who knows? But it’s not coming overnight. They’re prepared. So for us doing business and for the large banks, New York Stock Exchange, working with the technology, I’m not worried at all.

Christian, over here.

I’m a little slow. I’m sorry. I don’t see where from 500,000 ounces or pounds of copper, where it turns into some kind of an asset. Warehouse receipts, what’s the transformative action or creation that goes from a token to a copper? I would ask the same question about a Bitcoin, but I’ll save that for later.

So the question is about the mine-to-market model. So how can we create a value which is still in the ground and put it up? So basically, it is about a mine which is coming into production, which produces and refines, in this case, copper in a LME Grade A on site or with a partner. And so we know it’s coming into production with a certain amount of capacity, right? So we can plan ahead with that. But we can use this kind of a pre-purchase of the underlying asset right now to finance mine operations, partly maybe as a mix with your traditional financing options. And then—

We don’t know what that copper is coming into production.

What is for sure—

So the question is I don’t know if it comes into production.

Well, you are the experts, right? So we are picking some of the largest, most reputable mines to start with. You’re right. There are risk involves, whether it’s geopolitical risk or weather, climate or whatever. That’s something which we basically put into different product categories. But ultimately, it is the goal that we have a reliable partner in Nevada, Arizona, for example, in the US, who has the knowledge and the ability, who’s done it before. So that’s why at the moment we are talking to some of the largest mining companies, who have decades of experience, to bring that out from the ground, right?

There’s another question. So perhaps I can just clarify there that the tokens are simply another version of the current equity that is issued against reserves and resources in the ground on that same basis. Okay, next question.

Hi, Adam Ziff, Data Vault AI. I think the previous question was also about redemption. Are you talking about tokenization purely for the redemption of the commodity at the redemption point, or are you looking at tokenization as a value add, as a commodity for fiat, for the regular investor?

That’s a very important question because what we now see with tokenized gold is, at the moment on the blockchain, these are not made for redemption. In theory you could, but nobody does it. It’s just a new vehicle to trade gold and have exposure to gold price. In this case, with industrial metals, we have to think differently, and we want to really solve this mine to market model like this Amazon moment, to have a shop where you can actually buy physical copper and just use the blockchain as a tool. So it will be a mixture around.

So from the past we have tokenized physical gold bars, platinum, silver and diamonds, and we’ve seen that 30, around 30% of our clients are actually redeeming it fast, and the other one is holding for some time. But the model itself, it is about redemption really. So each of these tokens, it’s coming down to one ounce of copper, one pound of copper, so you need a certain amount to actually get one stack of a lot of, I think, 25 tons.

Sorry, Adam, I’m going to take one other question, just behind you there, and that will be the last one to wrap up. Thank you.

Yes. Thanks, Tim. This is starting to sound like royalty as opposed to a new coin. Is it more like your Bitcoin blockchain, where there’s really no physical value underneath, it’s all the perceived value and then traded amongst people who want to train that blockchain? Or is this where there’s actually tied in value underneath, that you’re taking the value that’s going to be created from the mine, attaching it to your trading instrument, and then people will be purchasing that and expecting to get value? Which is it?

Yeah. It’s exactly the second one which you described. So here we’re about tokenizing matter. So we want to do real backing. So it is an evolution of the mining industry and the commodity trading. It is not an invention of something which is... It’s not a financial product like a CDF or something which is not backed by anything, or some of the ETF products also, which are just linked to the price. Here we’re talking about real backing with commodities in one form or another. And we just start with copper because of the high demand, but it could be done with anything, whether it’s scandium, rare earth, or even aluminum or other industrial metals.

All right. Thank you. There’s plenty of time for questions afterwards with the book signing in the networking lounge. Monty’s made himself available very generously, so please do avail yourself of that if you have more questions. Monty, thank you. Fascinating, and we look forward to the developments.

Thank you. [audience applauding]