Exceptional diamonds can tie up an owner's capital for years, while prospective investors may lack the resources to purchase an entire stone or the means to assess its investment value.
Panel 5 at the Dubai Diamond Conference 2026 examined whether tokenization could address these challenges. Moderated by Neil Ventura, Special Advisor, Precious Stones, DMCC, the session explored the problems the proposed models seek to solve, how they operate and the barriers to their adoption.
The discussion revealed two approaches. Four speakers outlined models for fractional ownership of individual certified diamonds, while a fifth proposed a digital unit backed by a diversified pool of natural diamonds.
Amit Dhamani of Dhamani Jewels Group used a US$1 million red diamond to explain how a certified, insured stone could remain in custody while being divided into digital tokens. The model could offer investors 10,000 tokens worth US$100 each or 100 tokens worth US$10,000 each.
“Someone who could never buy a red diamond can now own a share of one,” he said. Smart contracts would record ownership, transfers and the distribution of proceeds when the stone is sold.
Dhamani said the business had worked on the model for approximately five years and submitted a white paper to Dubai's Virtual Assets Regulatory Authority (VARA) soon after its formation. The proposed launch would begin with smaller stones, investor funds held in escrow and provisions to return the money if something went wrong. “We would rather prove it carefully than scale it carelessly,” he said.
Martin Leake of Martin Leake FZCO outlined a similar model being developed with technology firm Ctrl Alt and Billiton Diamond. The initiative addresses the pressure on manufacturers who pay upfront for rough diamonds but may wait a considerable time before selling the resulting polished stones. It also seeks to address investors' difficulty in assessing whether a diamond's price is fair.
“The grading certificate describes the stone,” he said. “It does not establish the investment value.”
The proposed model would use independent valuations before tokens are issued, wholesale-level pricing and published exit mechanisms. One potential option would allow a holder seeking full ownership to initiate an auction to buy out other investors, with the opening bid set at a double-digit premium to fair value. Leake clarified that this was “a potential exit opportunity, not a guaranteed return.”
Ilya Shichanin of Ctrl Alt drew parallels with the company's work on tokenising title deeds for the Dubai Land Department, which enables transfers between investors. He argued that diamonds share several characteristics with real estate, including uniqueness, illiquidity and documentation-intensive transfers.
However, he cautioned against overstating the technology's capabilities. “We're not going to pretend tokenization is some kind of magic wand,” he said. It would not create a spot price for diamonds but could make ownership records more reliable.
Jamal Akhtar of Billiton Diamond highlighted the commercial opportunity for businesses holding exceptional stones and investors seeking exposure without committing the entire purchase amount to a single diamond. He described tokenization as “the second engine of growth for our industry.”
Daniel Wolfe of Facent Open Market Administration presented a different proposition through Facet, a digital unit backed by a large, diversified pool of natural diamonds held in trust. Unlike fractional ownership models, the product would not represent a share in an individual stone.
“For 4,000 years, diamonds have been collateral,” he said. “They've never been money.”
Wolfe argued that financial markets had yet to develop for diamonds the kind of pooled investment structures created for commercial property in the 1980s. He also questioned the backing of several crypto assets and argued that stablecoins can leave holders carrying risk while issuers retain the returns.
Under the proposed Facet model, new units would be issued only as diamonds were acquired, making it a “rules-based, price-disciplined, long-hold buyer” for the trade. The portfolio would respond to end-consumer demand. Wolfe said that if the bridal market shifted towards lab-grown diamonds, Facet would not purchase the equivalent natural stones.
Certificates, images and 3D videos would be recorded on-chain, while pricing would be based on a published algorithm that investors could examine.
Wolfe said natural diamonds were approximately 1% financialised, compared with 40% for gold. These figures were presented during the panel and require confirmation before publication.
“We're not a stablecoin,” he stressed. “We're not a tokenized inventory product.”
Despite their differing approaches, both groups identified four major challenges: liquidity, pricing, regulation and exit mechanisms. On liquidity, Amit Dhamani said, “Tokenizing an asset does not automatically make it liquid. You need buyers, you need sellers and you need market makers.” Pricing remains another challenge, as exceptional diamonds have no daily quoted price. While fractional ownership models depend on credible, independent valuations, Facet proposes using a published pricing algorithm.
Regulation was also a recurring theme, with Dubai's Virtual Assets Regulatory Authority (VARA) framework cited as a reason to develop the models in the emirate. “Our intention is to build with the regulator, not around it,” Dhamani said. Clear exit mechanisms were identified as essential for investor confidence. “A clear exit policy is not a feature, it's a foundation,” he said. Martin Leake's proposed buy-out auction and Facet's proposed buy-back below a specified price band offer different approaches to providing investors with an exit route.
Jamal Akhtar said independent valuations, accountability from supplier to custodian and upfront disclosure of conflicts were essential to building trust. “Transparency in the ecosystem is a requirement,” he said. “It's a foundation of trust.”
For manufacturers and dealers holding high-value diamonds, fractional ownership represents the more immediate opportunity. It could release working capital without requiring a distressed sale. Participants in this group called for partnerships with marketplaces, technology providers, investors and banks.
Facet's proposal is a longer-term proposition. If successful, it could establish a sustained buyer of natural diamonds, although investors would need to trust the pricing algorithm in a market that does not have a conventional spot price.
Both approaches are being developed in Dubai, where an established diamond trade, digital infrastructure and a regulatory framework for virtual assets provide the operating environment.
The key question remains which model can attract investors while demonstrating credible valuations, transparent ownership, regulatory compliance and workable exit mechanisms.
As Dhamani put it: “Rare things have always been owned by a few. Our ambition is to keep them rare, but make them reachable.”