Blockchain-based diamond commodity exchange CEDEX announced that it has secured over 6,000 diamonds worth more than $50 million to start trading on the platform.
Commenting on this development, Saar Levi, co-founder and CEO of CEDEX, said: “The vast inventory available combined with CEDEX unique technology opens up for traditional and digital markets the opportunity to develop financial instruments that will initially create the liquidity needed to jumpstart our vision – transforming diamonds into a new asset class.”
As mentioned in the press release shared with Finance Magnates, the exchange is also planning to launch a diamond-backed exchange-traded fund (ETF) which is currently under the development stage.
A Fungible Way to Trade Diamond
The ETF will be “generic” in nature and will allow investors to trade diamonds as a financial asset class, according to the exchange. The company is also in talks to ink deals with other firms across the world including commodity and retail brokerages, exchanges, ETF issuers, and banks to introduce the ETF product to their clients.
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The company also detailed that each diamond in its listing will be unique in nature allowing traders to invest in stones of different size and value, and thus diversifying their portfolio and mitigating market risks.
“Bridging the gap between existing financial markets and the diamond industry will fuel this untapped market from a $90 billion industry to an estimated $300-$400 billion,” Levi added.
Listing Diamond on Blockchain
CEDEX is a venture that is attempting to develop a blockchain-based online diamond exchange. Its goal is to implement technology which could turn diamonds into a tradeable asset class.
Last year, Finance Magnates reported that the blockchain-based commodity exchange has raised $20 million in a token sale round. The exchange came into limelight after receiving an investment from financial technology provider TechFinancials in October 2017.