Hedera’s Diamond Tokenization unlocks a new era of investment

Investors can now buy diamonds, which have always been popular and desirable due to the available technology. Despite the long-standing recognition of diamonds as a symbol of wealth and security, the demand for these valuable gems typically necessitates specific skills and funding.

The winding road toward investment in diamond trading was expensive. Although standardized diamonds are increasingly considered a viable investment option worth approximately $1.2 trillion globally, they only constitute nearly 1% of the diamond market due to some specific barriers and complexities.

Once the company sees the depth of the opportunity here, Diamond Standard becomes the game changer, making investment in diamonds available to everybody. By leading the way in standardizing and tokenizing diamonds, they have made them more accessible to people who would have avoided involvement in the market for one reason or another.

Diamond Standard’s process consists of procuring diamonds from a worldwide network of suppliers, with more reasonable miners given a chance to be in the market. These diamonds are graded using AI and machine learning technology to assist in identifying buyers. The International Gemological Institute (IGI) issues certificates for chosen diamonds.

The diamonds are organized into stop standard sets that are securely kept inside tamper-proof receptacles known as Diamond Standard Coins and Bars. Diamonds of equivalent value are deposited in each container to ensure uniformity and fungibility, which are key to 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 deliberate decision based on efficient transaction processing, affordable cost, and security features.

HTS allows for accurately converting physical diamonds into digital assets, connecting token ownership with physical possession. Investors can easily trade these tokens via digital asset platforms without physically handling or possessing the diamond.

The Hedera Consensus Service (HCS) enhances the existing economy by enabling transparent and immutable verification of all transactions related to Diamond Commodity Tokens, thereby providing an additional layer of security and reliability.

The decision by Diamond Standard to tokenize diamonds on the Hedera network aligns with their fundamental principles and values of environmental, social, and governance (ESG), reflecting Hedera’s commitment to running a carbon-neutral business model. This synergistic approach stresses the common concern of simultaneously supporting nature conservation and creating new ideas.

In the future, the Diamond Standard has launched a token called Bitcarbon, which represents partial ownership of the real Coin and Bar of their Diamond Standard. This provides a viable option for stablecoins because a real and long-term asset can back them. A real coin from Diamond Standard has 5,000 Bitcarbon tokens, whilst a bar contains 50,000. It enables more accurate and diverse investments.

Diamond Standard, operating in accordance with the Digital Asset Business Act of Bermuda and Deloitte’s annual examinations, is developing a novel method for investors to interact with diamonds’ distinctive qualities.

Diamond Standard’s implementation of blockchain not only created an easier and more transparent investment outlet but also increased investor demand for such investment options, pointing to a bright future for the conventional asset class of diamonds.