Buy Diamond with Cryptocurrency: Israel diamond exchange rules out backroom deals with 'the carat' coin

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Israel's diamond exchange - one of the largest in the world - is looking to revamp its industry, by launching its own cryptocurrency. But for the plan to work - a marketplace long ruled by cash and backroom deals must embrace a highly erratic technology. CGTN's Maria Galang with more.

Transparency as clear as one of these gems, that's what Israel's diamond center is looking for. Diamond transactions have been increasingly difficult to track - they're often carried out anonymously with minimal documentation - and the trade is becoming a vehicle for crime financing. Industry players here hope digital currencies will change that. The exchange is launching two digital coins.

ELIE AVIDAR, MANAGING DIRECTOR ISRAEL DIAMOND EXCHANGE "It will make our business much more transparent, quick and it will enhance the industry, it will make it easier to send money from one part of the world to the other part of the world in a basically click on your mobile and click on the software so this will solve a lot of problems and will make the business much more profitable."

The coins are aptly named "the cut" and "the carat".

AVISHAI SHOUSHAN FOUNDER AND CEO, CARAT IO "Cut is a token to trade diamonds and jewels on a global scale, the other one would be carat and that token is going to allow the outer markets, the financial markets, to finally invest in the diamond world."

Backers of the move say the coins will be less volatile than Bitcoin. But some critics disagree.

MARTIN RAPAPORT THE RAPAPORT GROUP "Cryptocurrencies are a bit of a fad right now, I'm not sure about their long term sustainability, now diamonds have an inherent value and that inherent value has been around for centuries. Whether or not you can take that and hype it into something modern and something interesting like a cryptocurrency is highly questionable."

The Cut is expected to be in use in a few weeks - and traders will receive digital wallets only after being vetted by the exchange. MG CGTN.