A new online platform that allows traders to physically purchase or trade diamonds via blockchain was launched from Dubai on Sunday, company officials said.
Al Kasir Portal is a joint venture between the private office of Sheikh Ahmed Bin Obaid Al Maktoum, which is a government entity established to partner with or support businesses in which it sees growth opportunities and Dubai-based Al Kasir Jewellery company - a one-year old company led by Indian businessman Amit Lakhanapal, who works in several other sectors, including real-estate. Al Kasir Jewellery company has not yet opened a store in Dubai but is expected to open its first one soon.
“What is happening is, let us say you buy like $500,000 or whatever price worth of diamonds, you will need to update your address… and we will have the physical diamonds delivered at your place along with the insurance,” Al Kasir Portal’s director of sales and marketing, Vikram Bangera, told media on the sidelines of the press conference.
“Now, along with the diamond delivery, we are also giving you a blockchain (online) wallet which is going to hold your tokens. Say, for instance you bought $500 worth of diamonds, you are getting $500 worth of blockchain assets,” he added. Bangera said these blockchain assets could later be used to buy new diamonds or any of the other products offered on the portal.
Blockchain first emerged as the technology underpinning the formation and trading of cryptocurrencies, a secured form of digital currency that could be bought and traded online between two parties without intervention from governments or financial authorities. Blockchain has been hailed by many businesses and governments due to its transparent, highly secure nature.
Bangera said the idea behind Al Kasir Portal is to encourage the re-purchases of diamonds. However, traders on the portal – unlike on cryptocurrency portals – cannot get their money back in cash but can redeem it through the purchase of products offered on the portal.
Both Bangera and Lakhanapal stressed that their platform does not trade in cryptocurrency. Lakhanapal said cryptocurrencies have no asset-backed value, are volatile and are made out of “thin air”.
Globally, cryptocurrency trading remains mostly unregulated and several banks in the United States and United Kingdom have previously announced plans to ban the use of credit cards in cryptocurrency-related transactions.
However, Dubai Multi Commodities Centre announced in February it had begun to allow firms involved in proprietary trading in 'cryptocommodities' - including currencies - to operate from its free zone. The regulator of Abu Dhabi's international financial centre also said it is considering coming up with a set of rules for cryptocurrency exchanges and intermediaries.
Lakhanapal last year founded Money Trade Coin in Dubai, a form of cryptocurrency that was certified by the Dubai government.
The 33-year old entrepreneur said his company’s initial capital stands at 5 million UAE dirhams ($1.36 million). He said the partnership with Dubai’s private office of Sheikh Ahmed Bin Obaid Al Maktoum – which owns a 51 percent stake in the company - will help to support his business.
“They are helping me. This morning I was in a radio station for an interview. The question they asked me: ‘why would we trust you?’ You are a new person in the UAE. You just completed one year over here, so why would we trust you?’. I said: ‘We have a joint venture with his highness’. So for me, their name is much more important and I respect them for giving me this name and joining this name with us,” Lakhanapal told Zawya on the sidelines of the press conference.
Bangera told the media on the sidelines of Sunday’s event that the company is targeting revenue of between 45 million UAE dirhams to 250 million dirhams, which will come from the sale of diamonds as the portal – unlike most cryptocurrency trading platforms - does not take fees in exchange for its services.
Dubai is a hub for diamond trading.
(Reporting by Yasmine Saleh; Editing by Michael Fahy)
© ZAWYA 2018