In declarations issued to the popular online news channel The Times of Israel, Mr. Eli Avidar, Managing Director of the Diamond Exchange of Ramat Gan announced that said institution was initiating the necessary activities to issue a cryptocurrency based on diamonds.
This measure seeks to increase trade and make transactions in a more transparent way, remembering that the use of blockchain technologies would allow a permanent audit of operations.
The “Carat”
According to statements, the new cryptocurrency will be called “Carat” (in reference to the international unit used for measuring gemstones and pearls) and only 25% of its issue will have real support in diamonds, which means that 75% will be left to the speculative market. This with a view to trying to attract some investors who still do not trust the use of cryptocurrency because they could represent a risk product of a “bubble popping”.
The “Cut”
In a similar way, they also announced the emission of another cryptocurrency, the “Cut” (in reference to the treatment given to the rough diamond to turn it into a jewel). This currency will not have the same characteristics as the “Carat” and will only be used among dealers to facilitate commercial operations.
The Future of trading is the tokenization of assets
Ramat Gan’s measure seems to confirm once again that the future of commercial operations points towards the tokenization of assets and their trade. Israel follows the steps that have already been taken by countries like United Kingdom backing it’s digital cryptocurrency DGX with one gram of 99.99% approved gold, stored in a Singapore vault, and Venezuela backing its digital cryptocurrency Petro (PTR) with oil from their Orinoco Oil Belt by a legally tokenized contract. Both allow users to own ERC20 tokens by the worth of said commodities.
In the future, more commodities and goods might be incorporated into blockchain networks being tokenized, which will facilitate global operations in a faster, transparent and with less bureaucracy.
Israel’s diamond market managed figures of around $ 7 billion in 2017 making it one of the 3 most important diamond markets next to India and Belgium.
