An American organisation with operations in Bermuda has announced the launch of the Diamond Standard Spot Market, enabling free and instant trading of Diamond Standard Coins.

The move comes after Diamond Standard closed a $30 million investment round as it ramps up operations to satisfy growing investor demand for the world’s only regulator-approved diamond commodities.

Diamond Standard said the funding round was co-led by Brooklyn, New York-based Left Lane Capital and Manhattan-headquartered Horizon Kinetics.

The capital raise, designed to expand production capacity and accelerate distribution of the company’s Diamond Coin and Diamond Bar, follows the launch of the Diamond Standard Fund, which enables investors to allocate to a new asset class – diamonds – through shares, rather than holding physical diamonds directly.

The firm said it was hiring aggressively and building a new bar assembly facility in collaboration with the International Gemological Institute.

Cormac Kinney, founder and CEO of Diamond Standard, said: "Investors need a new uncorrelated asset class and this capital will enable us to increase capacity and expand our offerings."

Murray Stahl, co-founder & CEO of Horizon Kinetics, and a member of the board of directors at the Bermuda Stock Exchange, said: "The Diamond Standard offerings are a perfect fit for the contrarian, innovation, value and inflation protection goals of Horizon Kinetics and like-minded investors."

Jason Fiedler, managing partner of Left Lane Capital, said: "While many investors and start-ups over-indexed towards digital-backed assets, we got excited by real-asset backed stores of long-term value.

“Investors have typically held about 20 per cent of market value for a given commodity. Diamonds have withstood the test of time, and thanks to Diamond Standard, investors finally have access to the asset class in a convenient, safe and trusted manner."

Each Diamond Standard Coin contains a blockchain token, stored on a wireless chip inside the transparent plastic coin, underneath the fungible set of diamonds. Whoever owns this regulator-licensed token, owns the commodity, and can take delivery at any time.

The spot market is a peer-to-peer marketplace with a centralised limit order book, where individuals or marketmakers can trade the Diamond Standard tokens for USDC stablecoins, issued by Circle and pegged to US dollars. There are no transaction fees for the trading.

Diamond Standard said the spot market was offered by DS Admin Trust, a Delaware trust that managed the custody of Diamond Standard commodities at Brinks, for their owners and traders.

Unlike shares held by brokers or crypto currency held by exchanges, the Diamond Standard tokens are held in digital wallets directly controlled by the owners, Diamond Standard Inc said.

Mr Kinney said: "The Diamond Standard Spot Market is a huge leap forward for diamonds as an asset class. Trades have on average been within one per cent of the spot price on Bloomberg, showing that our commodities are truly fungible.

“A Diamond Standard Coin is 'marked-to-market' daily, and trades with dramatically less 'friction' than loose diamonds, which can be 20-40 per cent, through an auction house, pawn shop, or jeweller.”

While Diamond Standard's offerings of commodities and tokens are overseen by the Bermuda Monetary Authority, the spot market is not – it is a US-based venue.

Bermudian-based Diamond Standard Limited is licensed by the BMA under the Digital Asset Business Act 2018.

Allowed business activities under the license are “issuing, selling or redeeming virtual coins, tokens or any other form of digital assets”.