Diamond Standard Co. has launched CARATS, a blockchain payment system using tokenised diamonds as collateral for transactions, aiming to bypass regulatory challenges faced by traditional payment services.

CARATS allows users to buy, trade, and transfer tokenised diamonds or exchange them for physical diamonds, avoiding the need for money transmitter licenses.

This system enables payments via SMS or social media, catering to the unbanked.

Unlike cryptocurrencies, CARATS is backed by real-world assets, making it less susceptible to regulatory hurdles.

CEO Cormac Kinney emphasises the platform's potential to overcome issues that hinder centralised exchanges and traditional payment innovators like Elon Musk's X.