Blockchain Diamond Exchange CEDEX, U2 Diamonds Partner To Facilitate Diamond ETFbr>
Blockchain diamond exchange CEDEX has teamed with U2 Diamonds to support issuers that are looking to issue the first diamond exchange-traded fund (ETF).
CEDEX allows investors to securely trade in digitized diamonds (DDC – Digital Diamond Certificate), while enabling diamond holders to liquidate their assets. Using the innovative DEX proprietary algorithm and blockchain technology, CEDEX claims it has overcome the lack of transparency, liquidity and standardization that has held back diamonds from trading online.
U2, through its subsidiary U2 Diamond Prices, is regulated in the UK by the FCA as an EU Benchmark Administrator. The firm uses prices from arms’ length transactions in the wholesale diamond market to publish investable diamond indices that can be used to link to financial products.
In a press release release, the two parties announced that they have entered into a joint venture (JV) that will create clarity and certainty to the diamond market by providing price point transparency and combining DEX technology with the FCA regulated indices of U2.
“This breakthrough in regulatory approval for financial diamond indices, alongside CEDEX’s technology, will allow institutions to generate financial contracts and instruments with appropriately-priced underlying assets linked to them – making a diamond ETF achievable. With only 1% of the current value of the diamond market being used for financial investment, the JV creates the opportunity to develop diamond linked products as a non-correlated alternative asset class for investment and preservation of wealth similar to the way precious metals are used as a safe haven by investors.”
The two firms also agree to undertake marketing of polished diamond indices to ETF and Future issuers, enhance the Advanced Diamond Index accuracy based on the CEDEX proprietary algorithm DEX price feed, and jointly promote and market advanced diamond Indices to market participants.
CEDEX CEO Saar Levi said that the partnership with U2 Diamonds unlocks an exciting new development, not only for the diamond market, but for the global financial market as a whole.
“An FCA-regulated diamond index coupled with the DEX creates the infrastructure for a new financial asset class,” Levi said. “This infrastructure with the increased security and efficiency the blockchain offers, will not only allow diamond holders to liquidate their assets at a fair price thanks to CEDEX’s price feed, but financial institutions will be able to trade diamonds at low carry cost and with a diversified risk profile that matches their trading strategies. We have connected to diamond suppliers and listed already over $100 million worth of diamonds on our platform. We are currently in talks with tier 1 & 2 ETF and Futures Issuers, Index Providers, Market Makers, Authorized Participants (APs), banks, exchanges and other financial institutions.”