# Carats are Commodity Tokens
Carats are created by Diamond Standard Coins and Bars, which are regulator-licensed commodities that are approved to settle futures and options and be held by ETF funds. Each Coin or Bar contains an optimized and fungible set of certified natural diamonds, acquired through transparent bidding on an exchange. The commodities are equivalent, and trade at a market price listed by Bloomberg. These standardized commodities contain a wireless encryption chip, providing integrated authentication, audit and blockchain record-keeping features.
About $1.2 trillion of diamonds are owned by consumers world-wide. Unlike Bitcoin, which was overwhelmingly distributed to early-adopters and created with minimal economic input, natural diamonds were mined over generations, and represent substantial economic value—from the input of capital, labor, resources and taxes.
Diamonds are the ideal natural resource for a decentralized reserve behind a global currency, because of their broad distribution to consumers, dense value, diminishing supply, easy authentication, and portability. Gold by comparison is 600 times heavier per dollar.
The Diamond Standard commodities make diamonds fungible and easily traded. Commodity ownership, of Coins and Bars held by approved custodians, is conveyed by trading the tokens issued by the Coins and Bars.
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