A joint venture claimed to be supported by a member of Dubai’s ruling family has launched three cryptocurrency assets backed by diamonds.
Al Kasir Group, which says it is part of a joint venture under the private office of HH Sheikh Ahmed Bin Obaid Al Maktoum, said its new diamond trading model uses the digital ledger technology behind bitcoin, blockchain.
The firm’s director Amit Lakhanpal said its offering was different to other cryptocurrencies seen as “objects of radical speculation and high volatility” with “potentially huge price corrections”.
“Most cryptocurrencies are practically a poor store of value and means of barter-like exchange. This gives rise to a need for a more secure alternative,” he said.
The three assets it is offering – Al Mas, Al Haqeek and Al Falah – are claimed to be backed by Indian Gemological Institute (IGI) certified real diamonds and therefore “better capable to store and translate value”.
Al Kasir, which has a jewellery trading division and online portal, said as a pre initial crypto asset offering (ICAO) announced it would be selling the three products on its online store with pricing packages from $250 to $250,000.
Against these products the company said customers would be given IGI certified diamonds of the same value after the completion of the ICAO.
“Along with the diamonds the buyer will also get crypto-assets. These crypto-assets can subsequently be used to physically procure a range of products like precious stones, perfumes, oud, bakhoor and attar from the company’s online shopping portal,” said Lakhanpal, who is also founder of the Money Trade Coin Group.
“The buyer can redeem only 50 per cent of the product purchase value in crypto currency and the remaining 50 per cent will have to be made via currency payments for future purchases.”
The firm eventually plans to offer these products for sale across the counter with plans to open 1,000 stores in Southeast Asia, Europe, the UK and the Gulf.
“The public trading will commence tentatively between August 21 and 24, 2018 during Eid Al Adha,” Lakhanpal said.
The three assets are also due to be traded on their own crypto-asset exchange directly against other cryptocurrencies like bitcoin and ethereum, diamonds, precious gemstones, oud, bakhoor and attar.
In February, a Dubai gold trader Regal RA DMCC claimed to be the first company in the Middle East to obtain a licence to trade cryptocurrencies.
The company will offer the storage of bitcoin, ethereum and other currencies in a vault at DMCC’s Almas Tower headquarters in Jumeirah Lake Towers, DMCC said in a statement carried by Bloomberg.
Another Dubai-based cryptocurrency firm, Alibabacoin Foundation, is currently being sued in the United States by Chinese e-commerce retailer Alibaba in a trademark lawsuit.
The UAE’s Securities and Commodities Authority (SCA) in February warned investors about digital token-based fundraising activities including initial coin offerings, token presales and token crowdsales due to their “highly speculative and highly volatile regarding prices”.
This followed a slump in bitcoin value that month from a high of $19,511 on December 18 to a brief low of $7,614.