The UAE-chaired Kimberley Process (KP) is considering using blockchain technology to enhance security in the trade of diamonds.

A mid-year report from the organisation highlights blockchain as a potential tool to prevent so-called ‘blood diamonds’ – diamonds mined from war zones and sold to finance the conflict – to be traded in the market.

According to the report, blockchain could help to fight KP certificates fraud and reduce the impact of human error while uploading data. It notes, however, that adopting blockchain technology “would be a long process requiring a great deal of research”, due to the high “cost and complexity of implementation”. A spokesperson for the KP chairman tells GTR that part of the complexity has to do with the due diligence required at “every conceivable level” to assess and interpret any impact implementation may have. Also, as final decisions within the KP are made by consensus of its members, reaching overall agreement may be a lengthy process.

A number of blockchain-based solutions tracking origination and trading of diamonds, such as Everledger and Block Verify, have already been active in preventing fraud or illicit trade. According to the KP report, the organisation is in touch with technology providers to adapt their solutions to the KP Certification Scheme, and it is working on a pilot project using blockchain to monitor KP statistics. KP expects to give an update on the project in November.

The Kimberley Process was set up by the United Nations in 2003 as an initiative between governments, industry and civil society to stem the flow of conflict diamonds into the trade of the precious stones. It counts 54 members representing 81 countries.

The UAE has grown its presence as a trading centre for precious stones, increasing its trade from less than US$5mn to around $40mn in the space of a decade.