In a significant development for both the diamond and Islamic finance sectors, Diamond Standard’s innovative diamond-based commodities—coins and bars composed of standardized sets of natural diamonds—have officially received approval as Sharia-compliant.
This certification paves the way for the use of diamonds as a legitimate commodity in Islamic finance, where traditional interest-based lending is not permissible. Instead of earning interest, Islamic finance structures rely on asset-backed transactions, typically using approved commodities like nickel, aluminum, and copper. Gold and silver, despite their value, are restricted due to their use as currency in Islamic tradition.
The approval was granted by Sheikh Dr. Mohamed Ali Elgari, a respected figure in Islamic finance based in Saudi Arabia. His endorsement affirms that diamond-based financial instruments meet the stringent ethical and legal criteria under Sharia law. The certification legitimizes diamonds as a viable asset class in financial arrangements structured for Muslim investors and institutions.
Diamond Standard’s entry into this space is not merely symbolic. The company has already taken concrete steps by launching a dedicated commodity holding and trading firm within the Gulf Cooperation Council (GCC). With $280 million in capital commitments, this entity is positioned to supply compliant diamond commodities to Islamic financial institutions and trading platforms across the region.
To facilitate secure and tax-efficient custody, the company has partnered with the Dubai Multi Commodities Centre (DMCC). This move ensures that diamonds are stored in a free zone, allowing them to avoid international tariffs—particularly those imposed on shipments entering key markets such as the United States.
The approval not only validates diamonds as an Islamic financial instrument but also expands the utility of these high-value stones far beyond jewellery. With their dense value and ease of storage compared to bulkier commodities, diamonds present a compelling proposition for financial institutions seeking compliant, efficient, and modern asset solutions.
This milestone marks a broader shift in how natural diamonds are perceived—as not just decorative assets, but as integral elements in the evolving global commodities and financial ecosystems.
