|The Israel Diamond Institute (IDI) has announced that the Israel Diamond Exchange (IDE) has signed an agreement with start-up CARATS.IO to launch a digital currency backed by diamonds.
The currency, named CDC (CARATS.IO Diamond Currency), will reportedly be based solely on investments in diamonds purchased at the Israel Diamond Exchange. Trading in this currency will be based on an index that reflects activity within the Israeli diamond industry. The announcement notes that the IDE has chosen to support this venture as a way of boosting trade within the bourse.
Commenting on the deal, IDE President Yoram Dvash says, "For the past several years there have been many attempts to turn diamonds into a viable financial instrument, but none have succeeded. We believe in order to achieve this it is essential to bring in parties from outside the diamond world, as part of the Innovation Center which we have established in the Diamond Exchange."
Continues Dvash: "Bringing new investors to the diamond sector in Israel is important for the local industry and for the country. We intend to make use of the incredible expertise that Israel's high tech industry offers."
The IDE partner, CARATS.IO, a start-up specializing in Big Data solutions for the precious gems and diamond industries, stated: "The diamond industry can be an attractive investment channel for the many investors in digital currencies. This currency is unique as it will be backed by investments in diamonds, which have steadily appreciated over time. There is a large community of investors in digital currencies throughout the world. By backing this currency with diamonds we are significantly decreasing the speculative level of the investment. Our cooperation with the Israel Diamond Exchange is an important step in making this currency a reality."
The IDI announcement further notes that, "Digital currencies have become attractive investment channels in recent years. The Financial Times reported last week that a group of leading banks, including Credit Suisse, Barclays, HSBC and others have joined together to launch a new form of digital cash for clearing and settling financial transactions in 2018. "With the rising popularity of digital currencies, IDE and CARAT.IO believe that the diamond backed currency will be an attractive option for investors outside of the diamond world who are seeking new avenues for digital investments."