JERUSALEM, Aug 1 (Reuters) - Israeli startup Carats.io said on Wednesday it was partnering with Celsius, a blockchain-based financial platform, to market its diamond-backed cryptocurrency after the Israel Diamond Exchange ended its affiliation with the company.
Finance in the diamond industry has been drying up in recent years with banks cutting back lending. Carats.io said that by using New York-based Celsius’ network, people will be able to receive loans and earn interest on their diamond investments.
Its digital coin, called CARAT, will be fully backed by diamonds, which the company said should make them less volatile.
“Our CARAT coins are ... in full compliance with all the regulations and protocols of the financial sectors as well the governments and international agencies,” said Eli Avidar, Carats.io president.
Carats.io, together with the Israeli diamond bourse, in February announced the launch of digital currencies to be used for trading diamonds and as an investment tool. It had committed to back a quarter of the market value of the coins with diamonds.
The diamond exchange later said it was cutting ties after Israel’s diamond regulator, which has yet to formulate policy on cryptocurrencies, did not grant Carats.io a license to trade in diamonds. (Reporting by Ari Rabinovitch; Editing by Tova Cohen)