Investors can now purchase diamonds, which have always been popular and desirable due to the technology available. Despite the long-standing recognition of diamonds as a symbol of wealth and security, demand for these valuable gemstones typically requires specific skills and financing.
The winding road to investment in the diamond trade was expensive. Although standardized diamonds are increasingly considered a viable investment option worth approximately $1.2 trillion worldwide, they only represent nearly 1% of the diamond market due to a number of specific barriers and complexities.
Once the company sees the depth of opportunity here, Diamond Standard will be the game changer investments in diamonds available to everyone. By leading the way in standardizing and symbolizing diamonds, they have made them more accessible to people who for one reason or another would have avoided involvement in the market.
Diamond Standard’s process involves acquiring diamonds from a global network of suppliers, giving more reasonable miners the opportunity to enter the market. These diamonds are graded using AI and machine learning technology to help identify buyers. The International Gemological Institute (IGI) issues certificates for selected diamonds.
The diamonds are organized into stopper standard sets that are kept securely in tamper-proof containers known as Diamond Standard Coins and Bars. Diamonds of equal value are deposited in each container to ensure uniformity and fungibility, which are essential for investor confidence.
Each container contains a ‘Commodity Token’ computer chip that serves as a bridge between the physical and virtual domains. On the blockchain, commodity tokens symbolize diamonds. Choosing Hedera’s Token Service (HTS) for the Hedera network was a conscious decision, based on efficient transaction processing, affordable costs and security features.
HTS makes it possible to accurately convert physical diamonds into digital assets, linking token ownership to physical ownership. Investors can easily trade these tokens via digital asset platforms without physically handling or owning the diamond.
The Hedera Consensus Service (HCS) enhances the existing economics by enabling transparent and immutable verification of all transactions involving Diamond Commodity Tokens, providing an additional layer of security and reliability.
Diamond Standard’s decision to tokenize diamonds on the Hedera network aligns with their fundamental environmental, social and governance (ESG) principles and values, and reflects Hedera’s commitment to operating a carbon-neutral business model. This synergistic approach emphasizes the common concern to simultaneously support conservation and create new ideas.
Moving forward, the Diamond Standard has launched a token called Bitcarbon, which represents partial ownership of their Diamond Standard’s real coin and bar. This provides a viable option for stablecoins as they can be backed by a real and long-term asset. A real coin from Diamond Standard has 5,000 Bitcarbon tokens, while a bar contains 50,000. It enables more accurate and diverse investments.
Diamond Standard, operating in accordance with Bermuda’s Digital Asset Business Act and Deloitte’s annual surveys, is developing a new method for investors to interact with the distinctive qualities of diamonds.
Diamond Standard’s implementation of blockchain not only created a simpler and more transparent investment channel, but also increased investor demand for such investment options, indicating a bright future for the conventional diamond asset class.