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Abu Dhabi, UAEMonday 18 June 2018

A crypto asset backed by diamonds launches in Dubai

The Sharia-compliant concept hopes to bring stability to the crypto space

Investors can exchange their cryptoasset investment for diamonds of an equivalent value, certified by the Indian Gemological Institute. Siphiwe Sibeko / Reuters
Investors can exchange their cryptoasset investment for diamonds of an equivalent value, certified by the Indian Gemological Institute. Siphiwe Sibeko / Reuters

A new crypto asset backed by diamonds launched in Dubai on Sunday aiming to give investors interested in the blockchain space “a more secure alternative”.

The joint venture between Al Kasir Group and the private office of Sheikh Ahmed bin Obaid Al Maktoum, a member of the Dubai royal family, said it offers buyers a tangible return on their investment as the crypto assets can be redeemed for diamonds of the same value.

Entrepreneur Amit Lakhanpal, the founder of Al Kasir Group, said the Al Mas crypto asset is the first diamond trading concept based on blockchain technology, offering investors "the convenience of a digital currency with the stability of a traditional asset" as each blockchain asset is pegged to the value of an authentic natural diamond.

“This is a venture of traditional trading along with the latest technology, which is blockchain,” said Mr Lakhanpal. “Our headquarters may be Dubai but in five years we want to rule the diamond industry.”

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Cryptocurrencies, such as Bitcoin, which slumped 52 per cent in the first quarter of this year, have faced numerous challenges in recent months as global policy makers draw up fresh regulations on everything from exchanges to initial coin offerings. The Reserve Bank of India, for example, banned banks and financial institutions from trading cryptocurrencies.

Al Kasir Group was keen to distance itself from the label of being a digital coin.

“Please do not confuse these blockchain assets with cryptocurrencies. These assets will not be redeemable against cash, they are only redeemable on the inhouse portal that the company will launch on August 16,” said Mr Lakhanpal.

Al Mas was one of three crypto assets unveiled at the event. The other two were Al Haqeek, redeemable against precious gems and Al Falah, which can be redeemed against luxury perfumes such as Oud, Attar, and Bakhoor.

During the crypto asset's Initial Crypto Asset Offering (ICAO), which has several phases of sale starting on Sunday and ending in the middle of August, investors can spend a minimum of $250, which is the equivalent of 25 blockchain assets, priced at $10 each. The maximum spend is $250,000.

Once the offering is complete, investors can exchange their blockchain asset for diamonds of an equivalent value, certified by the Indian Gemological Institute, as well as gems or perfumes depending on which crypto asset they purchased.

The company also plans to open 1,000 physical stores in the next year across the Gulf, south east Asia, Europe and the UK, with the crypto assets available to purchase over the counter.

All three crypto assets are Sharia-compliant, as they are backed by a physical asset. It follows in the footsteps of OneGram, a digital currency completely backed by gold, which launched in Dubai last year. OneGram partnered with GoldGuard, a Dubai-based online gold trading platform, for its offering, with each token backed by one gram of gold, held in a vault at Dubai Airport Free Zone.