On stage at IBM Edge, Leanne Kemp, the CEO and Founder of London-based blockchain startup Everledger, unveiled the company’s newly constructed platform to digitally certify diamonds traced through the Kimberley Process certification process. Built on IBM’s high-security network for blockchain, (IBM Bluemix and delivered via the cloud) which is underpinned by IBM LinuxONE™, Everledger has spent the past year developing a global, digital certification system that tracks and protects the world’s luxury goods. Starting with the $47Billion polished diamond industry, Everledger created relationships with the major diamond certification houses to digitally encrypt over 980,000 diamonds on the blockchain. Now the company has extended this technology to tackle the trade of rough diamonds certified through the UN-mandated Kimberley Process.
“We have driven the pace of innovation over the past months to engineer the technology necessary for a solution of this scale to be released to market,” says Leanne Kemp, CEO and Founder of Everledger. “Working with IBM Blockchain based on code from the Hyperledger Project as the backbone of our operations we’ve been able to move faster than anticipated to build a platform that can solve both immediate problems being faced by the diamond industry, in addition to unlocking the potential to transform the way we protect commodities being traded in marketplaces globally.”
An evolution of Everledger’s current certification system, the new platform will ensure the security and traceability of rough diamonds certified through the Kimberley Process: a 3-step verification system created in 2003 with 81 authorized countries to curb the sale of conflict stones. Fast forward seven years and 99% of the world’s diamonds are from conflict-free zones, however critical problems remain in the industry including insurance fraud, the financing of global pipelines and the tampering of official certification. Paper based processes continue to cripple the transparency and authenticity required when it comes to the trade of diamonds.
For example a fraudulent Kimberley Process certificate was recently reported as being used in a shipment of synthetic stones from Sierra Leone to Hong Kong. The number of fraudulent insurance claims also continues to grow, with no viable way for insurers to guarantee the authentic product has been lost or stolen. All of these problems continue to have impact on the availability of diamond supply chain finance as banks and financiers remain hesitant to risk more capital where losses continue to rise. Building a system fueled by blockchain’s core characteristics – immutability, security, speed and scalability – is Everledger’s first step towards ensuring the goods we’re trading and consuming are sourced by ethical means and can be traced throughout the item’s lifetime journey.
“As a nascent technology, blockchain holds a great deal of promise in addressing some of the world’s key challenges,”says Ross A. Mauri, general manager, IBM z Systems and LinuxONE. “Everledger’s dedication to applying Hyperledger Project-based blockchain technology to combat the trade of conflict diamonds shows their commitment to innovating for real impact. The high-security business network is helping make their offering ready for business.”
Everledger is working on several projects in the Kimberley Certificate space over the next year and continues to extend the company’s core capabilities to ensure transparency at every stage of a diamond’s journey from mine to counter. Watch this space!