Gulf Energy Exchange to launch oil backed stablecoin on Circle Blockchain

Bahrain and UAE based Gulf Energy Exchange (GEX) announced that it would be launching the world’s first oil-backed stablecoin, OIL1, subject to regulatory approval by the Central Bank of Kingdom of Bahrain.

Announcing OIL1, the world’s first oil-backed digital asset, a stablecoin and will be collateralized by verified reserves of Gulf crude oil and pegged to both the U.S. dollar (USD) and the price of Gulf crude oil, creating an unprecedented link between the energy sector and the digital asset economy.

According to GEX, tokenization will broaden access to energy assets by lowering barriers for retail traders, enabling smaller investment denominations and 24/7 market access, with programmable, near-instant transfers and on chain settlement.

Explaining the reasoning for OIL1 stablecoin GEX notes that a dual peg structure provides investors with a transparent and reliable hedge against both currency volatility and commodity price fluctuations, while opening global access to energy-backed financial instruments and friction-less and accelerated global oil trading.

OIL1 will be backed by a diversified reserve basket, including Circle’s USDC and USD1 to support liquidity, transparency, and resilience. OIL1 will be powered by Arc, an open Layer-1 blockchain from Circle, and secured by Microsoft’s enterprise-grade cloud architecture with managed security services provided by ITC Secure, a Microsoft Gold cybersecurity partner.

“OIL1 demonstrates how digital dollars and enterprise-grade blockchain infrastructure can responsibly expand access to real-world assets at global scale. By supporting tokenized energy markets with trusted, transparent, and secure infrastructure, this initiative reflects the next phase of integrating digital finance into the world’s most important commodity systems,” said Kash Razzaghi, Chief Business Officer at Circle

Funded by a consortium of US investors, led by C5 Capital, GEX is a new model for how digital assets in the global energy market can be traded.

“OIL1 combines the stability of the U.S. 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.

“The launch of OIL1 represents a landmark moment in the convergence of global energy markets and digital finance. As cyber security partner with Microsoft, ITC Secure is proud to support OIL1 with enterprise-grade security designed to protect critical infrastructure, digital assets and market trust from day one. Building a credible, globally trusted oil-backed digital asset demands resilience, transparency and security at its core. Our role is to ensure that this new digital energy instrument is secure by design and resilient at scale.” – Arno Robbertse, Chief Executive Officer, ITC Secure