Wall Street is speculating on uranium prices. Do Uranium Digital use blockchain to promote the process of uranium financialization?

Author: Zen, PANews

Uranium, known as "one of the most important metals in the world", is the heaviest native element that nature can find and is also the main fuel for nuclear power generation. Under the tide of global energy transformation, nuclear power is ushering in a revival, and uranium, as the core resource of this clean energy, its market demand is continuing to grow. Uranium trading is also becoming one of the hottest categories on Wall Street, attracting large financial institutions such as Goldman Sachs and hedge funds to join the market.

However, in sharp contrast to the importance of uranium, its market infrastructure is backward, its lack of efficient spot trading mechanisms, low price transparency, and limited liquidity, which is far less than traditional commodities such as oil and natural gas.

How to truly enter the modern financial system? This is exactly the problem that the American team Uranium Digital is trying to solve. Through blockchain technology, Uranium Digital is trying to build the world's first 24/7 all-weather, compliant uranium spot trading market, providing real-time pricing, physical and non-physical settlement, derivatives trading and other functions, so that uranium has the same market infrastructure as other commodities.

**Global nuclear energy revival, uranium market ushers in new

opportunities**

Driven by growth in emerging economies, global demand for future electricity and energy has increased significantly. At the same time, the limitation of total greenhouse gas emissions further highlights the importance of clean energy. With the continuous improvement of the nuclear industry in safety, production efficiency and reactor power in recent years, nuclear energy has become one of the core issues of the international community's energy policy discussion.

In December 2023, at the COP28 United Nations Climate Change Conference, 22 countries including the United States, Canada, the United Kingdom and other 22 countries jointly issued the Triple-Drift Nuclear Energy Declaration, which includes joint efforts to triple global nuclear energy capacity by 2050. Later, at COP29 held in 2024, the number of countries that promised to support the target increased to 31, and another 140 nuclear industry enterprises and 14 major global banks expressed their support. In March this year, at the Global Energy Forum CERAWeek, energy "large consumer" such as Amazon, Google, Meta, and Dow signed a "large energy user commitment letter" to support the implementation of this goal. This is also the first time that major companies outside the nuclear energy field have jointly publicly supported the extensive and coordinated expansion of nuclear power.

22 countries initiate the 2050 Triple Nuclear Energy Declaration

At present, global nuclear power production capacity has been steadily improving. At an event held by the Atlantic Council, the U.S. think tank, in early February this year, International Energy Agency Administrator Fatih Birol said that global nuclear power generation is expected to reach an all-time high in 2025, and more than 40 countries have formulated plans to build or expand nuclear capacity. According to the International Atomic Energy Agency report, as of September 2023, there were 410 nuclear power reactors operating in 32 countries around the world, and another 57 nuclear power reactors under construction.

Uranium prices have been optimistic in the past few years due to the continued increase in demand brought by the global nuclear power recovery and the impact of insufficient long-term capital expenditures and strong supply rigidity and frequent disturbances. From the second half of 2023 to the beginning of 2024, the uranium price accelerated from US$59/pound to a high of US$107/pound. With the supply shortage and prices continue to rise, physical uranium and related securities products have been popular, and uranium trading has once become the hottest category on Wall Street, including investment banks Goldman Sachs, McGrie and some hedge funds, which are actively participating in uranium trading.

Key commodity and uranium lagging market mechanisms

In the wave of global energy transformation, a market that matches uranium, a key clean energy commodity, is an extremely inefficient market. Today, the uranium market trades about 190 million pounds per year, worth over 10 billion US dollars. However, because long-term contracts dominate uranium trading, it is difficult for futures prices to fully reflect the real supply and demand situation of the market, and the uranium market lacks basic financial market facilities that other commodities generally have, such as real-time spot pricing, financial and physical settlement, derivatives trading, and an effective price discovery mechanism for open markets.

At present, the trading mechanism of the uranium market is relatively backward, with low transparency, poor liquidity, and lack of the infrastructure that modern financial markets should have. The main pain points include:

1. The spot market is missing and the trading threshold is high. Individuals and institutions who want to have direct access to the uranium market need to become licensed traders or brokers and purchase uranium products through over-the-counter (OTC) transactions. Another option is to invest in uranium-related ETFs or mining company stocks, but this does not provide real uranium price exposure;

2. There is a lack of financial instruments and lack of room for speculative trading. Uranium market prices fluctuate violently and should theoretically become an ideal market for speculative traders. However, due to the lack of derivatives such as futures, forwards, swaps, options, etc. in the market, speculative capital is difficult to enter, limiting the market's trading depth and liquidity.

3. The price discovery mechanism is opaque. The current uranium price is mainly determined by private bilateral agreements, and the price information is highly opaque, which affects the pricing efficiency of the entire nuclear fuel supply chain. In comparison, the scale of financial transactions in the coal market is 7 times that of the physical market, and the natural gas market is even 23 times, while the uranium market has almost no similar financial market size.

Against this background, Uranium Digital takes blockchain technology as the core and is committed to building the world's first 24/7 all-weather, compliant, and institutional-level uranium spot trading market, so that uranium has the same financial transaction infrastructure as other commodities. Uranium Digital's philosophy has also quickly received support from venture capital institutions. In December last year, Uranium Digital completed a $1.7 million Pre-Seed round of financing, led by Portal Ventures, Framework Ventures and Karatage, as well as multiple angel investors; in March this year, Uranium Digital announced that it had raised $6.1 million in seed round of funds, led by Framework Ventures.

Uranium Digital completes $6.1 million seed round

Reshape the uranium spot market with crypto infrastructure

Uranium Digital is creating a modern blockchain-based uranium trading market that gives uranium the same trading mechanism and liquidity as other commodities, and is expected to be officially launched later this year. Uranium Digital adopts a dual-track model of physical settlement and non-physical settlement. Physically Settled is designed for licensed institutional traders and realizes warehousing and delivery through Uranium Digital's partners; Financially Settled is specifically for institutional and retail investors, allowing them to directly contact the uranium market price without having to deal with complex regulatory processes.

In the derivatives market, Uranium Digital plans to launch derivatives such as futures, options, perpetual contracts, swaps, etc. to improve market liquidity and provide institutional investors with more trading strategies. Uranium Digital will also build the first uranium market price oracle to provide instant and public uranium price data to change the current situation of opaque prices.

Due to the particular nature of uranium, its transactions are strictly regulated, involving KYC/AML requirements, and require strict tracking of the whereabouts of each pound of uranium. Traditional transaction systems are difficult to handle these requirements efficiently, and the traceability, transparency and decentralization of blockchain technology make it naturally suitable for the uranium market.

Blockchain can record every uranium transaction, and the circulation from mine to end users is clear at a glance, reducing the risk of illegal transactions. In addition, smart contracts enable automated settlement, increase transaction speeds and reduce human intervention, and the blockchain-based uranium market can provide verifiable real-time prices, improving market efficiency and fairness.

In the new era of nuclear energy revival, Uranium Digital plans to build the world's first modern uranium trading market. A transparent, efficient and liquid uranium market that miners, traders, institutional investors, and retail traders can participate in will allow this key clean energy commodity to truly enter the global capital market. This road is bound to be difficult, with many participants involved, and there are still many challenges to whether it can operate successfully.