Blockchain is a Girl’s Best Friend: Startups Modernising the Diamond Trade

The process of converting the shiny stones into cryptographic tokens has begun.

Diamonds have been traded for thousands of years. Much like gold, they are a natural commodity to which human beings have long attached great intrinsic value. However unlike gold, and most other commodities, the diamond trade has remained largely physical, that is, diamonds have not been available for trade as financial assets.

Modernising the industry has been a challenge for a number of reasons – monopolies, high costs, and the fact that diamond valuation is a niche expertise. For most people, their only experience of diamonds is the one-time experience (if they’re lucky) of buying an engagement ring.

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Blockchain technology has now made it possible to turn diamonds into financial assets by representing their value with tokens. Here is a spotlight on three startups that are planning to make the esoteric diamond industry more accessible.


Before diamonds are sold, they must be mined, sorted, cut, polished and valued – Glitzkoin, a startup from Estonia, wants to use blockchain technology to coordinate the whole process. To this end, it will integrate mining/shipping/insurance entities onto its platform.

It also aims to open a decentralised diamond exchange which will enable anyone “to invest in individual diamonds, shares of a high-value stone or shares in a basket of diamonds like an ETF.”

Shares in a high-value diamond will be represented by a smart contract. When physical delivery of such a diamond is executed, the contract would be audited and digital wallets updated.

The Glitzkoin blockchain is based on Stellar and runs with a utility token called GLT. According to the website, the blockchain keeps transaction data private through encryption tools so that “transaction data and trade secrets remain encrypted and obscured from competitors.”

By removing the many middlemen from the system, the company hopes to make diamonds cheaper and thus enable diamond dealers to be able to sell to more people. An added benefit will be lowering “the possibility of concealed information related to the stones”.

According to its whitepaper: “Tracing the provenance of diamonds shows how the application of this technology can fundamentally change the way diamonds are exchanged. A diamond’s provenance is often threatened by conflict stones and the tampering of certificates.”

The issue of conflict stones was illustrated in the popular movie “Blood Diamonds”. Diamonds are found in the third world, but for over a century the trade was completely monopolised by foreign companies and used to fund conflicts like the civil war in Sierra Leone. In May 2000, diamond producers met in Kimberly, South Africa, to discuss the issue of conflict diamonds, and they came up with the Kimberly Process. It requires countries to have legislation in place to meet minimum requirements of production transparency and restricts commerce to other Kimberly-certified countries only.

According to the Glitzkoin website, its token sale is to be completed on the 25th of June 2018. GLT tokens will be listed on cryptocurrency exchanges in the third quarter of 2018, and in the fourth quarter the decentralised exchange will be launched.


CEDEX is an Israel-based startup that aims to open the world’s first blockchain-based diamond exchange.

According to its website, the mission statement of CEDEX is “bridging the gap between the traditional diamond industry and the innovative financial markets”. To this end, it touts three principles: transparency, liquidity, and standardisation.

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In other words, the aim is to turn diamonds into a liquid asset by creating a standardised price benchmark and conducting trade in a transparent fashion using blockchain technology. By doing this, it hopes to facilitate a busier market – non-experts can finally understand what they are buying, and they will have a range of investment options including investment in a single diamond, shares in a single diamond, ETFs, and other derivatives.

CEDEX will have access to diamonds listed on IDEX, which is an online business-to-business diamond marketplace to which over 1,000 buyers are connected. Holders of diamonds will also be able to “upload” their stones to the CEDEX blockchain. The company will use a propriety algorithm called DEX to price the stones. This algorithm will enable laypeople to evaluate what they are investing in.

Its blockchain is built on Ethereum. It will be powered by the CEDEX Coin, an ERC-20 token that will be the only means of payment allowed on the exchange. 82 million of these tokens were sold in its ICO, which raised a total of $20 million.

It is through this utility token that derivative investment is made possible. It will be transferable to other cryptocurrencies and fiat currencies.

CEDEX is currently registering its coin at cryptocurrency exchanges, and it plans to launch its exchange in the first quarter of 2019.

Regarding ethical diamonds, Ronen Priewer, CEO of CEDEX, told Finance Magnates: “CEDEX offers GIA certified diamonds, which means that the diamonds went already through the diamond industry Kimberly process. Currently in the diamond industry there are several initiatives to incorporate blockchain technology. The purpose is to follow the journey of the diamond from rough to polish at the retail store. For CEDEX – which is also a blockchain project – it means that we will be able to use existing infrastructure to show our investors not only the value and GA certification, but also the journey of the diamond. Hence – assisting in preventing ‘conflict diamonds’ to make stage into the market.”

The GIA (Gemological Institute of America) is a nonprofit organisation that sets and maintains the quality benchmarks of diamonds. According to its website, it “fully supports the Kimberley Process Certification Scheme and upholds its principles” and works with the World Diamond Council to stop the supply of conflict diamonds. is an Israeli startup that is taking a slightly different approach to the issue. It aims to create a token which is backed by the value of diamonds, in the same way, that dollars were once backed by gold held in Fort Knox, or more recently, how the cryptocurrency Tether is backed by dollars. According to its website: “The CARAT Token holds the eternal value of diamonds, so holders can store and transfer tokens without fear of volatility.”

It works with the Israel Diamond Exchange. Israel is responsible for approximately 12 percent of the world’s diamond trade. The country is a member of the Kimberly Process, chairing the organisation in 2010, and all of the diamonds on the IDE are GIA-certified.

Chief Product Officer Gabriel Diamant said: “We are using only GIA certified natural diamonds which means non-conflict diamonds. We see ourselves increasing the use in non-conflict diamonds, by that we might see reduced demand for the conflict diamonds.” is using the diamonds registered on the IDE to develop an index of diamonds called the Get-Diamond Index. The GDX is now the official index of the IDE, and over 10 billion USD worth of diamonds are on the index so far, according to Diamant.

When someone buys a Carat token, buys the equivalent worth of diamonds from the IDE. The contents of the safe is checked by an external auditing company (Ernst & Young). Like the previous two startups, hopes to open up the market and make diamonds into an investable asset.

We reported on in May when it raised $1.6 million in a funding round. The company’s first token generation event is set to begin in Q3 2018.


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