Blockchain in Gems & Jewellery: A New Era of Transparency

The gems and jewellery supply chain is complex, involving multiple stakeholders—miners, traders, manufacturers, retailers, and consumers. Historically, tracing a gemstone’s journey was challenging, leading to concerns about unethical sourcing, counterfeits, and fraud. Blockchain technology offers a decentralized and tamper-proof ledger system that records every transaction in real-time, making it a game-changer for the industry.

Blockchain Initiative to Provide Traceability from Mine to Market

The infiltration of blockchain technology into the diamond business received a major boost when Alrosa, the Russian rough diamond producer, joined De Beers’ Tracr platform. This collaboration means that the world’s two largest diamond producers, accounting for about 80% of rough diamonds by value, are now working together to provide enhanced assurance about the provenance and authenticity of diamonds.

According to its developers, Tracr is a tamper-proof digital registry for the diamond industry, allowing individual stones to be linked and tracked across the value chain. Blockchain securely and transparently records the chain of transactions and integrates sophisticated identification techniques to verify the connection between the digital record and the physical diamond. Secondary data, such as gemological reports, Sarine scans, and Kimberley Process certificates, can be added to a stone’s primary record while being encrypted to protect sensitive trade information.

Primary and Secondary Data Tracking

A diamond typically begins its journey on Tracr once it is mined and registered with a unique identity.

• Primary information such as weight and color is uploaded.
• Secondary data, including photographs, Sarine scans, and Kimberley Process certificates, are added to enrich traceability.

Each blockchain entry corresponds to a specific period when the stone is held by a single party, starting with the mining company. As rough diamonds move through the value chain, transactions are recorded immutably and verified, with additional details such as grading certificates and invoices added along the way.

When rough stones are cut into multiple polished stones, a single blockchain entry may split into multiple records, maintaining the link to the original rough diamond. This creates a digital certificate for each diamond, encompassing all key details from its mining origin to its final destination in jewellery.

Tracr essentially enables real-time tracking of every registered stone, marking a significant departure from De Beers’ previous practice of not disclosing the mine or country of origin. This shift underscores a new era of transparency in the diamond industry.

De Beers, one of the world’s largest diamond mining companies, has set an ambitious goal: to provide the origin and impact of every diamond it discovers and sells by 2030. To achieve this, De Beers has developed Tracr, a blockchain-based platform that integrates artificial intelligence (AI) and other technologies.

Tracr creates a unique digital ID for each diamond, recording its journey from mine to market. The system documents every stage, including which sightholder the diamond is sold to, its grading, cutting, and polishing. This immutable data trail ensures authenticity and origin verification. Currently, Tracr operates in the B2B sector, but plans are underway to introduce a consumer-facing interface.

De Beers has already registered half of its total rough diamond production on Tracr, reinforcing its commitment to transparency and ethical sourcing.

Gemfields, a leader in colored gemstones, has also embraced blockchain for provenance tracking. When the company discovered the Chipembele emerald, weighing 7,525 carats in Zambia, it registered the gemstone on Provenance Proof Blockchain (PPB).

Developed by Swiss jeweler House of Gübelin, PPB is a tamper-proof digital logbook that records each gemstone’s journey. The system uses a nano-tagging technology, which assigns a unique DNA identity to each gem. This ensures that once the emerald is cut and polished, the derived gemstones can be traced back to their original rough stone, offering unparalleled transparency.

PPB has already uploaded over 4 million gemstones and has a growing online marketplace developed with Everledger, allowing global traders to buy and sell verified gems.

The World Gold Council (WGC), in collaboration with the London Bullion Market Association (LBMA), launched the Gold Bar Integrity Programme (GBI) in 2022 to digitally track gold movements.

The GBI consists of:

A Security Feature that assigns a digital identity (a “passport”) to each gold bar.

A GBI Database, a blockchain-based ledger that records provenance data and chain-of-custody details.

A pilot project involving 30 industry participants across 13 locations tested the system in 2022. While promising, WGC acknowledges that further industry-wide collaboration is needed for full-scale implementation.

Blockchain ensures consumers receive verified information about their gemstone’s journey, from mining to retail.

With immutable records, blockchain helps prevent fake gemstones and fraudulent certifications from entering the market.

Companies can prove compliance with responsible sourcing initiatives, ensuring conflict-free diamonds and fair trade gemstones.

Shoppers can trust blockchain-backed products, leading to greater demand for ethically sourced jewellery.

While blockchain adoption is still evolving, it is poised to revolutionize the gems and jewellery industry. As leading companies like De Beers, Gemfields, and WGC continue refining their blockchain initiatives, more players are expected to follow suit. Shortly, blockchain could become the industry standard, ensuring complete transparency, authenticity, and ethical sourcing in jewellery purchases worldwide.

FAQs

By embracing blockchain, the jewellery industry is moving toward a future of trust, integrity, and innovation, ensuring consumers receive ethically sourced and verified products.