Ramat Gan: Carats.io, the fintech startup company that is issuing the world’s first-ever digital token backed by diamonds, has announced that it has signed an agreement with Tradomatics, a provider of fully autonomous trading technology, according to which Tradomatics will supply liquidity solutions on digital exchanges where CARAT tokens are traded.
According to the agreement, Tradomatics will facilitate the buying and selling of CARAT token, while maintaining its stability and value. Holders of other, more volatile cryptocurrencies will able to transfer their digital assets into CARAT tokens, whose is value is linked to the Diamond Financial Index (DFX), reflecting real-time prices in the diamond market. The DFX is historically stable, with an average annual volatility rate not exceeding 5% per annum.
The agreement also opens a range of opportunities for members of the diamond trade. By conducting business using CARAT tokens, they are able to hedge against losses created by unfavorable foreign exchange rates, which could potentially devalue their diamond holdings.
“We are now in the process of ensuring the market availability of CARAT tokens, thus enabling diamond dealers and jewelers to trade seamlessly and safely among themselves, or to convert their digital holdings into U.S. dollars on a moment’s notice, with minimal loss in value” said Eli Avidar, President of Carats.io. “Success in the diamond business requires the ability to make lightening decisions, and to have the financial flexibility and liquidity to back those up.”
“We selected Tradomatics as our partner because of its proven ability as a market maker and liquidity provider in traditional exchanges. Our goal is the stability of the CARAT token. This is the first step in the transformation of the diamond into a financial digital product, which in turn will streamline and grow the diamond market itself,” Mr. Avidar added.
“The digitalmarkets have in recent months undergone a process of growth and maturation,” said Shmuel Tal, Tradomatics’ CEO. “What was considered youthful enthusiasm has given way to a greater sense of responsibility, supported by sound economics and more solidly backed digital tokens. What we are seeing is the increasingly rational use of digital tokens, which are becoming building blocks in the commoditization of tradeable assets.”
“Tradomatics’ extensive experience in supplying liquidity to conventional security exchanges, in supporting the introduction of a diamond-backed digital token, will result in the creation a non-volatile financial asset with a high correlation to real-time prices in the diamond business,” Mr. Tal continued. “As such it will serve as an excellent hedge against the risks to which diamond traders are regularly exposed to in the currency markets. The CARAT token connects the Old World to the New World, integrating them and serving as a leader among the other backed digital tokens. I have no doubt that we are helping lay the foundation stone for a new financial market, and I am happy to be setting out on this journey with Carats.io.”
On September 25 Carats.io announced that trading in its diamond-backed CARAT token had begun on the Hotbit.io digital asset exchange platform, focused on the Southeast Asian markets. Demand for stable financial assets as alternatives to the U.S. dollar is strong in the region, as a result of the escalating trade war between the United States and China.