Decentralized, User Managed Reserve

The Diamond Standard Coins and Bars that asset-back Carats are decentralized, held in global vaults by exchange-approved precious metal custodians, and can be remotely audited.

The commodity owner controls the digital token linked to the wireless encryption chip inside their Coin or Bar. Each token is a vault receipt for a specific commodity, which is deliverable on demand, and has been approved as “good for delivery” by regulated exchanges to settle trades. The blockchain records the GIA diamond certificates and proof of provenance.

Diamond Standard Coin and Bar token holders can take delivery of their commodity, or deposit it with a custodian. The custodian performs optical authentication of the Coin or Bar, and an electronic authentication of the chip, to register the commodity as deliverable and protected by the custodian's insurance. This unlocks the integrated token for transactions.

To transact the token, the physical commodity must be held by an approved custodian, which provides insurance and guarantees that the Coin or Bar can be delivered to a buyer on demand. The audit of the wireless chip embedded in the commodity provides proof of such custody and deliverability. A trust administers custody for the benefit of commodity owners.

The Coin and Bar transaction tokens are issued on the Hashgraph blockchain network, recording ownership transactions, the commodity’s location, and any discount or premium inherent to that physical location, such as commodities that are encumbered (i.e. prevented from leaving China), or have paid a one-time tax (i.e. European VAT).

When an owner deposits their Diamond Standard commodity with a custodian, the custodian has no ability to transact the asset—the owner alone manages the key to the token.

The owner pays for custody and can remotely sell, borrow against, or attach their vault receipt token to a smart contract. Or the owner can convert their commodity into Carats.