De Beers to launch first diamond blockchain
The world’s largest diamond firm, De Beers, is building the first end-toend diamond industry blockchain platform named ‘Tracr’ in collaboration with other players. The platform, based on Etherium blockchain technology, will securely track a diamond along the full value chain. This platform is being designed to benefit all diamond industry stakeholders, including those from India, which processes a majority of the world’s diamonds.
The pilot was launched in January with a small group, which included Indian sightholders too. “The project will cover the full diamond value chain — from the mine to the end consumer — providing consumers with confidence in the product, the trade with increased efficiency, and lenders to the industry with greater visibility,” said Feriel Zerouki, senior vice-president, international relations and ethical initiatives, De Beers Group. De Beers is working with BCG Digital Ventures to build the platform and the underlying technology.
Deepak Gopalakrishna, director, global blockchain projects, BCG Digital Ventures, said, “Our platform currently builds on top of the most mature block chains in the market Ethereum. In addition to the ability to track diamonds from one end of the supply chain to another, we have built a privacy technology to protect participants’ data. It keeps data private and allows participants to share data with only those with whom they want to .” A rough diamond will be registered on the block chain at the miningstage, then recorded asit is sold to sightholders, and from there as it travels to cutting and polishing units, and on to the retail stage. Each transfer will be registered on the blockchain until it is sold to the consumer, with Tr a cr creating a permanent and immutable record of the diamond’s journey. The Tracr
team is designing integration solutions that will allow small and mid-size diamond cutting and polishing units to integrate on to the platform. Each participant would have to go through the KYC (know your customer) checks before joining to protect the integrity of the platform and to minimise any potentially nefarious behaviour.
Among Indian names figuring in the pilot project participants are Surat-headquartered Venus Jewel and Rosy Blue in New York. De Beers has invited other miners to join the blockchain project and make it an industry initiative. Blockchain will make the industry more transparent and virtually riskfree, say experts. The risk of duplicate or synthetic diamonds mixed with the original will also be eliminated. Consumers will get the exact product that they want to buy. Feriel said: “Some 60 per cent of the Indian diamond industry is in the
informal sector. Because Indian stakeholders are extremely vital for us, we are committed to making sure that players from India’s formal and informal sectors alike can benefit from Tracr. We will work closely with the Indian industry stakeholders to help them get integrated.”
She added that although the initial focus of the Tracr pilot has been on rough diamonds of 10.8 carats or more, the team has already started tracking some of the five to 10.8 carat rough diamonds, and plans to expand this to two-five carat segment in the coming months. The team is also using data science and physical identification techniques to develop a unique solution that will match a diamond’s physical properties to its digital record to ensure its authenticity.
Once the small and informal sector prepares to join the blockchain, Tracr will require common criteria to integrate them, especially for the informal
sector and smaller units.
The integration may be a big challenge. However, AnoopMehta, president, Bharat Diamond Bourse, the hub for diamond trade and industry in Mumbai, said, “In the long run, blockchain is a good idea. However, it should help in reducing administration paper work and costs for everyone.” The administration cost and time saving could be a deciding factor for smaller units to integrate with blockchain. The second challenge will be maintaining buyer-seller confidentiality. De Beers claims that the project is prepared with the privacy control given to users about what to share and with whom. The real benefit to everyone in the diamond value chain will be seen only when all mines, especially major mines, join the project. Otherwise, those working on diamonds purchased from mines not part of the blockchain project will have to keep separate records.