D1 Mint Acquires First $20M in Diamonds To Back Crypto-Coin

Technology
29/05/2018 14:41

D1 Mint Limited, the creator of the diamond-backed crypto asset D1 Coin, has signed its first purchase agreement to buy 1,500 investment-grade diamonds, valued at approximately $20 million, from diamond cutting and polishing company KGK Diamonds. The rough diamonds were supplied by the Russian mining company ALROSA, and have been deposited at a vault in Antwerp – the global centre for the diamond trade. The stones will eventually be shipped to the Gemological Institute of America (GIA) in New York for grading, laser-etching and packaging, before being secured in vaults in Singapore, Switzerland and select global locations with established logistics and storage specialists such as Brinks and Malca-Amit, while insurance is provided by Lloyds of London.

“Today we made a huge step forward in the development of D1, a project started a year ago to create an asset-backed token and to make diamonds an investable asset class,” D1 founder Hogi Hyun said. According to their whitepaper, D1 Coin is a diamond-backed cryptocurrency, with each D1 coin pegged to the value of a fraction of an authentic, natural diamond, as determined by the proprietary pricing algorithm, D1 Matrix. Users may at any point in time convert their D1 Coins to diamonds at a ratio determined by D1 Matrix, by selecting specific diamonds on the D1 website and arrange with D1 Agent for delivery or collection. Users who own D1 Coins may use them for a variety of purposes: payments, trading and investing. By being pegged to a fixed amount of investment-grade diamonds, D1 Coin aims to function as a convenient digital currency with limited amounts of speculative trading by having an intrinsic value derived from its asset-backing. The D1 Coin is a virtual currency built on the Ethereum blockchain.

Alexei Chekunkov, a member of ALROSA’s Board of Directors, said the company believes that the innovation of blockchain can transform the precious gem industry by making natural diamonds into an investment asset class with wider appeal across “various investor groups, driv[ing] higher demand.” D1 Mint adds, Blockchain technology was chosen as the platform to digitize physical diamonds, because transactions through cryptocurrency are fast and divisible, presenting a solution to diamonds being an illiquid asset. Through D1 Coins owners can effectively purchase fractional parts of a diamond. Furthermore, blockchain technology will grant D1 Coin users’ greater privacy, security and offer lower transaction fees.