What Is Gemstone Tokenization?

Gemstone tokenization is the process of taking a physical stone through sourcing, laboratory verification, valuation, insured custody and then issuing a blockchain token that points at that stone’s record.

The order matters. A token issued before the stone is identified and checked is just a promise. GemReserve describes the intended sequence on How it works: source, verify, appraise, custody, tokenize, own, trade, redeem.

The core steps

1. Identify the stone. Species, variety, weight, cut, origin claims and treatments.
2. Independent verification. A recognised gemmological laboratory issues or confirms a report. See independent verification.
3. Custody. The stone is logged into a vault with inventory controls. See custody and vaults.
4. Digital record. Images, report numbers and custody status go into a Digital Asset Passport.
5. Token issuance. A token is minted against that record under the legal terms of the programme.
6. Transfer and redemption. Holders transfer the token or request physical redemption when the rules allow.

Legal wrapper

The token only means what the issuer’s terms, the custody agreement and the applicable law say it means. Read risk disclosure and terms of use before treating any token as property.

Related: How gemstone tokenization works.