Jewellery giant Chow Tai Fook joins De Beers diamond blockchain program
Hong Kong-based jewellery giant Chow Tai Fook is the latest industry heavyweight to join De Beers' pilot of its end-to-end diamond blockchain program called Tracr, which aims at clearing the supply chain of imposters and conflict stones.
Chow Tai Fook’s participation will further extend the platform’s reach into the Asian diamond sector, particularly in Greater China, the world’s No. 1 diamond producer by value, De Beers said.
The Asian company is not foreign to initiatives to provide a single, tamper-proof and permanent digital record — from mine to consumer — for every diamond.
In September, the jewellery retailer had introduced a similar project developed with blockchain provider Everledger and secured by the IBM Blockchain Platform.
Tracr gives each diamond a unique ID that stores its characteristics such as weight, colour and clarity.
While the companies didn’t mention whether Chow Tai Fook had given up on its own tracking system or simply decided to test De Beers’ alternative at the same time, managing director Kent Wong noted that authenticity, provenance and traceability are becoming extremely important in the jewellery sector.
“We believe that our participation in Tracr will help ensure we are at the forefront of this important issue," Wong said in the joint statement.
Chow Tai Fook is just one of many sector leaders to have recently adopted distributed ledger technology, an umbrella term for a shared and synchronized database, to ensure the authenticity of the diamonds they sell by tracking them, from mine to shop. Their involvement is seen by analysts as an opportunity to clearly signal that they are willing to establish a closer and more transparent relationship with their consumers.
The world’s largest diamond jewellery retailer, Signet, was one of the first ones to join De Beers’ pilot earlier this year. Even Russia’s Alrosa (MCX:ALRS), the world’s No.1 diamond producer by output and De Beers’ main competitor, is now testing Tracr.
The blockchain platform gives each diamond a unique ID that stores stones characteristics such as weight, colour and clarity. To support the process, the system will also incorporate photos and planned outcome images.
Supporters of blockchain say the technology could soon become the verification standard. Several challenges will have to be overcome first, particularly those affecting smaller brands. Some of them have suggested that, at a time when the origin of diamonds has never been more scrutinized, the idea of blockchain is being overrated by laboratories loving the idea of charging for source testing.