The Far East Development Fund, which is full owned by state development bank Vnesheconombank (VEB), has partnered with Singapore-based Diamundi to launch of a new cryptocurrency, the ‘D1 Coin,’ backed by Siberian diamonds.
Diamonds are a traditionally illiquid asset class, but their tokenization means that anyone will be able to buy, own and sell a fractional value of a diamond.
“Being backed by the intrinsic value of a physical asset, the price of D1 Coins will generally be more stable than that of other cryptoassets. Thus, D1 Coins are a more secure store of value and reliable medium for transactions,” claimed the fund in earlier statements.
Starting from this month, according to company plans, digital asset investors will be able to buy these diamond-backed tokens in an open pre-sale. Further on, the Russian fund plans to have the token listed on such cryptocurrency exchanges such as Bitfinex, Bitstamp, bitFlyer, KCOIN and others. An agreement with Russian exchange Voskhod was inked in September 2017.
Tokenizing Siberia’s wealth
The diamonds used to back D1 Coins are “sourced from world class producers such as [Russia’s] Alrosa,” “certified by the Gemological Institute of America (GIA),” and “stored by a custodian in secured vaults in Singapore and Switzerland,” says the Russian fund.
After tokenizing diamonds, the fund intends to leverage other types of assets, from gold to gas: “We think we have several trillion dollars’ worth of valuables in Russia’s Far East,” said Alexei Chekunkov, chief executive of the Far East Development Fund, in an exchange with The Financial Times last week.
Thus the fund is acting “as an integrator between Russian and international companies.” It aims to “use the Blockchain technology to attract investment to traditional industries through the cooperation between manufacturers and advanced fintech developers,” reports Russian online publication Firrma.ru.
Unavailable white paper
While the value of Siberian diamonds is beyond any doubt, and their tokenization may arguably have a strong potential, the D1 Coin open pre-sale does not seem to have been well prepared. On the website, the whitepaper is not easy or impossible to download, while information about the date and the details of the open pre-sale is confusing or contradictory. Thus, the D1 Coins site indicates that the minimum subscription amount is $1000, while the Financial Times article refers to a $10 amount.
And while being interviewed by The Financial Times, the company representatives seem to have forgotten to update their Facebook page.
The idea of tokenizing diamonds is not new. Cedex, which presents itself as a “certified Blockchain-based diamond exchange,” has opened its token sale and plans to launch its platform in the fall of this year.
On its side, Carats.io has made an alliance with the Israel Diamond Exchange and plans to launch an ICO this year to “put the diamond world in the next generation of crypto tokens.”
Gold-backed cryptocurrencies are also emerging. One of them was launched earlier this year by Goldmint.io, a company with Russian roots operating internationally after raising some $6 million in an ICO in late 2017. The Goldmint token turned heads at a Paris meetup organized in late March by EWDN.
