Tokenized Diamond Investments Hit the Crypto Market
Blockchain technology has now expanded to accommodate tokenized commodities backed with significant value such as oil, gold, and even real estate. A growing interest in digitized commodities has infiltrated the blockchain ecosystem with the establishment of the Petro token backed by oil, the Ekon token with gold, and now the new introduction of CARAT, the latest tokenized commodity, backed by diamonds. Hotbit, a crypto exchange based in Taiwan is now offering crypto investors the opportunity to hold and trade digital assets called CARAT tokens backed by legitimate diamonds.
Created by an Israeli based venture called Carats.io, the token’s debut shows promising results for blockchain-enabled luxury commodity investments. The listing will help carry out secure and efficient overseas transactions as well as boost both liquidity and efficiency within the global diamond market.
The venture firm functions via one of the biggest trading networks for diamonds worldwide called IDEX, purchasing tangible stocks amounting to $120 million backed by tokens. According to reports in may, the firm successfully earned over $1.5 million by May 2018. Industry statistics estimate a yearly production of diamonds totals to approximately $13 billion with the majority originating from African regions.
Due to Hotbit’s surge of success in investor engagement pertaining to Asian diamonds, the firm decided to enlist their token on the exchange’s platform. According to Carats.io’s president, Eli Avidar, regions such as Southeast Asia are particularly interested in diamond-based investments as it offers what they believe to be an effective defense between trading wars existing between China and the US. Investors in the region seek stable alternatives to currencies not reliant on USD.
Tokenized Commodities Open New Doors For Global Investors
A rising concern exists between investors worldwide who believe USD values could significantly drop due to debts of more than $21 trillion in addition to the unsettling trade conflict between the US and China. For investors within the Southeast Asian region, sustainable commodities like diamonds offer reliable investment opportunities to combat local rising inflation trends.
The gold-backed ERC-20 token, Ekon, was successfully launched earlier this month by a multicurrency digital wallet app called Eidoo. Each token equates to a gram of 99.9% pure gold stored in secure vaults that undergo auditing every three months. Ekon investors have the added feature of viewing their physical deposits via video streaming.
For nations experiencing economic instability, gold and other physical commodity investments offer a means to secure purchasing power beyond high rates of inflation. Turkey, for example, has boosted importation of gold throughout their recent economic turmoil, drawing in more than 150 tons since the start of 2018. Digitizing such commodities could offer a solution for the high cost and risks associated with storing gold as well as facilitate liquidity for investors needing to sell.