A second coin, Carat, will be issued later and is meant for institutional and retail investors who want to invest in the diamond market without taking possession of physical diamonds.
"We are creating a way for people to invest in the market without actually buying and selling diamonds," Shoushan said.
A quarter of the market value of both coins will be backed by diamonds held by a third party. All this, he said, should make the tokens "much less volatile compared to any other cryptocurrency."
High Security
In the high security four-tower complex on the outskirts of Tel Aviv, $23 billion changed hands between local and foreign traders in 2017. The area is known as the diamond district, and visitors coming by train access it across Diamonds Bridge.
Visitors are fingerprinted before they can enter the buildings and look down on the world's largest trading floor. Should a diamond go missing, the entire complex locks down.
Israel's diamond district is full of polishers who specialize in large, high-end diamonds. The country cannot compete in smaller stones with massive operations in India and China. The trade by nature is global. The State Bank of India has a branch beside the exchange.
Israel's diamond exports in 2017 fell 12 percent to $15.5 billion. Consultancy Bain said in a 2017 industry review that diamond jewelry sales, which according to De Beers hovered at $80 billion in 2016, were "stagnant."
Slowing long-term demand and the shaky financial position of polishers are two big concerns, it said.
Martin Rapaport, chairman of the highly influential Rapaport Group whose diamond price list is a global industry benchmark, has a big presence in Israel and may have to compete with the new system.