- Avalanche introduces tokenised diamonds, tapping into a US$1.2tn market to democratise access with blockchain tech.
- Standardisation and transparency aim to boost diamond investment from 1%, leveraging the Bloomberg Diamond Standard Index.
- This move marks a significant leap in asset tokenisation, aligning with broader market trends towards digital securities.
Diamonds are forever!
No, this reference to the 1971 James Bond movie is not hinting that blockchain will feature in the next Bond flick, although it may be intriguing to the crypto community—it would likely put the movie theatre audience to sleep.
Related: Analyst Predicts Link Rally, Massive Price Targets Unveiled Amid Tokenisation Developments
And no, this is also not about those diamond hands you HODLers out there have, this is about actual Diamonds—but on the blockchain.
You heard that right, in the latest (very likely not the last) about tokenisation of real-world assets (RWA) news just broke that Avalanche is bringing Diamonds to the blockchain.
For the first time, investors now have access to a $1.2T natural resource, tokenized on Avalanche with the Diamond Standard Fund 💎
Did you know that on average, investors own 15-30% of gold, silver and platinum markets.
Investors only own 1% of diamonds, mostly due to lack of… pic.twitter.com/YBk4IIPs7T
— Avalanche 🔺 (@avax) March 27, 2024
Diamonds Soon an Investors Best Friend?
Avalanche just announced that investors can now access the US$1.2tn (AU$1.8tn) diamond market via a tokenised fund on Avalanche, backed by Diamond Standard, Horizon Kinetics, and Oasis Pro.
Avalanche said in the statement that only 1% of investors own diamonds “due to a lack of standardization and the subjectivity of its valuations.”
This innovation aims to increase diamond investment by offering standardisation and transparency through blockchain technology. The fund, aligned with the Bloomberg Diamond Standard Index (DIAMINDX), enhances liquidity and is IRA (Individual Retirement Account)-eligible, inviting pre-tax investments.
For the first time in history, Diamond Standard and Oasis Pro are making an approximately $1.2 trillion natural resource accessible to investors via a more convenient, tradable fund.
Cormac Kinney, Founder & CEO of Diamond Standard
Through the ERC3643 token standard and the administration by NAV Fund Administration Group, blockchain technology is leveraged to tokenise diamonds, offering a compliant, secure, and transparent method for investors to gain exposure to a traditionally illiquid asset class.
Tokenisation Is Future of Markets: BlackRock CEO
The news is big news for crypto and big news for Avalanche—despite this the AVAX price is down by almost 4% in the past 24 hours, of course, in crypto terms a minor blip.
Tokenisation of financial assets is likely not a game for one sole blockchain, with others like Chainlink also heavily getting involved.
And tradFi is also paying attention to the trend, with BlackRock CEO Larry Fink saying in an interview with CNBC in January that he believes the new Spot Bitcoin ETFs are a precursor to broader adoption of tokenisation of the wider financial markets.
ETFs are step one in the technological revolution in the financial markets. Step two is going to be the tokenization of every financial asset.
Larry Fink, BlackRock CEO
This comes as BlackRock launched an on-chain tokenised fund a few days ago, a step analysts Bernstein said “brings legitimacy” to crypto.
Related: CoinGecko Report Highlights Growth of Real-World Assets in Crypto
So, as tokenisation of the financial world brings it closer to crypto with the interesting diamond news—I’ll end with another diamond quote—as Henry Kissinger said: “A diamond is a chunk of coal that did well under pressure.”
Perhaps they just couldn’t resist the pressure to go digital.
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