The Israeli diamond exchange, one of the largest in the world, has announced the release of a cryptocurrency that is partially secured by diamonds, various news agencies report.
The goal is to make the market, which still prefers cash to plastic, more transparent. Current transactions are “often carried out anonymously, with the shake of a hand and minimal documentation,” Israel’s Justice Ministry recently stated.
The exchange will issue two coins: one called ‘carat,’ which is targeted at a wide range of investors; and one called ‘cut,’ which is intended to be used for settlements between professional traders in the diamond market.
Only 25 percent of the value of the ‘carat’ will be backed by physical diamonds traded on the exchange, its Managing Director Eli Avidar told the Times of Israel. The move is expected to reassure investors, he added.