Israeli Diamond Exchange Issues Its Cryptocurrency

Israeli Diamond Exchange Issues Its Cryptocurrency

The Israeli Diamond Exchange began issuing its cryptocurrency - for settlements between dealers and investors. This should breathe new life into the industry, which for a long time operated only with fiat money. However, the management of the exchange understands that it will first have to try hard to convince the traditionally conservative players of this market in the advantages of the new tool.

We foresee alignment behind this currency because it’s going to make things easy.

- Eli Avidar, managing director of the exchange, told in an interview.

This industry is facing challenges, and this is going to in a lot of aspects address those challenges ... the profitability element of the business, the speed of doing business, money laundering aspects and the problematic aspects of banking nowadays.

The Exchange is preparing to issue two cryptocurrencies at once. The first - Cut - is intended for settlements between dealers. Its pre-sale was launched on February 5. The second cryptocurrency will be called Carat. It is intended for institutional and retail investors and will be released later.

The cryptocurrency issued by the exchange will be 25% provided with diamonds, which should ensure its stability, in contrast to the same bitcoin. Also, according to the management of the exchange, the use of blocking technology will attract a new wave of financing and will make the trade in diamonds more efficient and transparent.

According to the report of the Ministry of Justice of Israel, the stock market of diamonds is now stagnant. This is due both to a small difference in price between rough and processed diamonds and to the fact that most of the transactions on the exchange are conducted informally and are not documented.

Recall that in December 2017 it became known that the Ministry of Finance and the Bank of Israel are considering the possibility of creating in the future state cryptocurrency. Israel's interest in this topic is caused by the desire to reduce the country's dependence on cash transactions, which increase the risk of money laundering and tax evasion.

Information Source: Reuters