WDX Organisation, the company behind the Wocu, or world currency unit, has announced that the new Navitas electronic exchange intends to price marine fuel (also known as bunker fuel) in the synthetic currency, as well as USD, from the second quarter of this year. The marine fuel market is around 200 million metric tonnes a year globally, valued at approximately $100 billion (or 60 billion Wocu) per year.
The Wocu is a synthetic basket of the currencies of the 20 largest countries by GDP. The weightings in back testing over the last 10 years have been reset annually based on IMF GDP figures; from now on the weightings will be reset at six-monthly intervals, the next reset is due on May 20.
WDX claim that observed volatility of the Wocu is substantially lower than any major currency. WDX anticipates, “that both consumer and producer will benefit greatly from the smoothing effect of the Wocu, as the oil industry and consumers are exposed significantly to USD currency volatility.” This is certainly borne out by the graph of comparative movement versus GBP during January.
 |
| Source: WDX Organisation Ltd. |
Upon the launch of the Wocu in September last year (Welcome to the Wocu), the weeklyFiX thought it would be hard for the currency to develop without a clear political will behind it. It is a bit early to retract that entirely, but perhaps commercial demand will be enough to sustain the Wocu. We have even heard talk that two of the banks in the top 10 of the Euromoney FX poll are looking at quoting Wocu prices. Whether or not talk becomes action, it’s too early to tell. Perhaps we should prepare to expand next year’s poll to include Best bank in Wocu, just in case.
