Blockchain is transforming one of the world’s oldest professions
Hong Kong based jeweller Chow Tai Fook says the blockchain can help stem trade in precious stones used to fund civil conflict in Africa, in addition to other uses in the jewellery business
Blockchain, the technology that promises to revolutionise the world of currency, has a new target in its sight: the jewellery business.
The industry, one of the oldest in existence, is looking to the blockchain to resolve issues ranging from insurance to helping customers ascertain the origin and authenticity of gemstones.
“In the jewellery business, trust is so important,” said Jade Lee, deputy general manager at Chow Tai Fook at the Hong Kong Fintech Week. “We are exploring the technology to see how we can put important information into the ledger.”
Lee said the blockchain can be used to help stem the trade in blood diamonds, the term for gemstones that are illicitly sourced from conflict areas in Africa, and widely regarded as one of the biggest reputational challenges to the industry. The blockchain can help reduce trade in illicit diamonds by removing the reliance on paper certificates that can easily be tampered or forged.
“You can make sure the whole supply chain – each individual stone – can be matched to the diamonds we sell,” Lee said, referring to the use of blockchain.
Blockchain’s ability to counter fraud has sparked interest from other fields, including banks and open marketplaces, thanks to its decentralised database which must approve a transaction before it can be recorded.
London-based start-up Everledger claims that by placing certifications on blockchain to prevent fraud, the global insurance industry could save US$50 billion annually.
The firm now has more than 1 million diamonds embedded into the blockchain and reportedly has plans to expand into other luxury goods, including fine art and high-end watches.
Still, where blockchain technology has helped the jewellery business, other advances in science have created new opportunity for fraudsters.
“New technology has made it that the diamond that took a million years to come out of the Earth can now be produced in a lab in one or two weeks,” said Pritesh Patel, chief operating officer of Gemmological Institute of America, the worldwide body that grades diamonds.
Lee said Chow Tai Fook is also looking into the technology to help with the challenge of provenance. “We hope blockchain can help to resolve it,” he said.
The Hong Kong jewellery retailer recently launched the T MARK programme to help consumers trace their precious stones from the mine, through to jewellery fabrication process and the retail supply chain.