De Beers says its new blockchain technology, Tracr, will transform the diamond industry when fully implemented.
“We believe that the blockchain technology has the potential to be transformative for the diamond industry by addressing some of its main concerns,” said Tom Montgomery, senior vice-president, Strategic Initiatives, De Beers Group.
“Crucially, it can support confidence in the diamond ecosystem by creating a tamper-proof, immutable record of a diamond’s journey throughout the value chain and ensuring that its provenance.”
In April 2017, De Beers started brainstorming ways that digital models could change the system.
“We distilled hundreds of ideas to arrive at the concept of a blockchain traceability platform which is now Tracr,” Montgomery said.
“Tracr currently uses Ethereum, one of the most secure, versatile and widely-adopted blockchain protocols, to build the platform. Being industry-focused, we have also developed a unique cutting-edge privacy technology piece to address specific industry concerns around privacy and data security.”
In early May, the company announced that it had successfully tracked 100 high-value diamonds through the blockchain platform.
“Initially, the focus of the pilot has been on recording a diamond’s journey as it passes through the value chain, so we have started with newly mined production,” Montgomery said. “The information is uploaded onto the Tracr platform at the point of allocation of rough diamonds to the manufacturers that are participating in the pilot.
De Beers worked with five diamond manufacturers during the pilot phase: Diacore, Diarough, KGK Group, Rosy Blue NV and Venus Jewel. Each company provided input into the development of a mechanism for integrating current recordkeeping with blockchain.
During talks with industry stakeholders, the De Beers team found a genuine demand for an inclusive digital system to trace and, therefore, track the value of diamonds.
“For this blockchain to work, it has to be embraced by the industry and provide benefits for all,” Montgomery said. “If people do not engage with the platform, it will be a wasted investment for De Beers. The more users that participate in the blockchain platform, the more effective it will be and the more value it will create for each and all its members.”
Tracr allows users to own their data and share it selectively, while ensuring immutable traceability on the blockchain.
“Neither De Beers nor other platform participants are or will be able to access data unless the data owner chooses to share it,” Montgomery said.
Montgomery added that Tracr has other benefits, which include “improved transparency and trust between sometimes untrusting parties,” efficiencies in the supply chain and potentially faster access to financing.
The pilot project for Tracr is ongoing and the company plans to expand the number of participants in the pilot project to get their input.
“We look forward to expanding the pool of participants soon in order to develop a truly comprehensive and workable solution for the industry,” Montgomery said.
Signet Jewelers is the latest company to join the project. A project team from Signet will work with the Tracr team members to ensure the platform works for jewellery manufacturers and retail.
“We have also been engaged in close discussions about Tracr with many key industry players, including other producers, manufacturers, retailers, industry associations, grading bodies, banks and logistics providers.”
The launch of Tracr is expected later this year. It’s too soon to predict when this technology will reach Canadian mines.
“The vision is to create the first comprehensive, end-to-end, independently governed blockchain — by the industry for the industry – that will ensure cast-iron provenance and immutable traceability for diamonds as they travel from the mine along the full value chain through to the end consumer.”
–This article originally appeared in the June 2018 issue of Diamonds in Canada magazine.