The security token backed by the Diamond Standard Fund is listed on the regulated Oasis Pro Markets, eligible for IRAs and available to institutional investors such as pension funds and endowments.
The offering makes the company’s “$1.2 trillion natural resource accessible to investors through a more convenient, tradable fund,” said Diamond Standard’s CEO.
Diamonds are the latest conventional asset to get the cryptocurrency industry’s glowing tokenization treatment, as the gemstones will now be accessible on blockchain rails to investors.
Crypto securities trading platform Oasis Pro has created a token on the Avalanche C-Chain that represents a stake in the Diamond Standard Fund, a product sponsored by Diamond Standard Commodities and Horizon Kinetics, the companies announced in a press release on Wednesday.
“For the first time in history, Diamond Standard and Oasis Pro are making a natural resource worth approximately $1.2 trillion accessible to investors through a more convenient, tradable fund,” said Cormac Kinney, founder and CEO of Diamond Standard.
The new offering came as real-world asset (RWA) tokenization – placing traditional assets such as gold, credit and bonds on blockchains in the form of a token – has become more popular over the past year. Global traditional finance giants such as Franklin Templeton and HSBC have participated in tokenization-related pilot projects or started offering services. Most recently, BlackRock introduced a tokenized fund backed by US Treasury bonds and repurchase agreements on the Ethereum blockchain.
The Diamond Standard Fund, which is benchmarked against Bloomberg’s Diamond Standard Index (DIAMINDX), is structured to be accessible to pension funds and endowments, while also being eligible for U.S. retirement accounts known as IRAs.
The token has adopted the ERC-3643 token standard, an open-source suite of smart contracts that enables the issuance, management, and transfer of authorized tokens aligned with tokenized assets.
“Tokenizing diamonds and providing exposure through a fund structure on Avalanche is a great example of how blockchain can bring transparency and efficiency to an asset class that was previously opaque and inaccessible to institutions,” said John Wu, president of Ava Labs, the ecosystem development organization behind Avalanche.