Israel-based fintech start-up Carats.io has signed an agreement with Tradomatics, a provider of fully autonomous trading technology, under which the latter will supply liquidity solutions on digital exchanges where CARAT tokens are traded. The move will offer solutions both to traders in more volatile crypto-currencies as well as diamond traders looking to hedge against foreign currency fluctuations, the partners said.

Under the agreement, Tradomatics will facilitate the buying and selling of CARAT token, while maintaining its stability and value. Holders of other, more volatile cryptocurrencies will be able to transfer their digital assets into CARAT tokens, whose value is linked to the Diamond Financial Index (DFX), reflecting real-time prices in the diamond market. The index is historically stable and the average annual volatility rate is under 5%, Carats.io said.

Eli Avidar, President of Carats.io said, "We are now in the process of ensuring the market availability of CARAT tokens, thus enabling diamond dealers and jewelers to trade seamlessly and safely among themselves, or to convert their digital holdings into U.S. dollars on a moment's notice, with minimal loss in value. Success in the diamond business requires the ability to make lightening decisions, and to have the financial flexibility and liquidity to back those up."

Avidar added that the company has partnered with Tradomatics as it has a proven ability as a market maker and liquidity provider in traditional exchanges. “Our goal is the stability of the CARAT token. This is the first step in the transformation of the diamond into a financial digital product, which in turn will streamline and grow the diamond market itself," he stated.

Shmuel Tal, Tradomatics' CEO said, "The digital markets have in recent months undergone a process of growth and maturation. What was considered youthful enthusiasm has given way to a greater sense of responsibility, supported by sound economics and more solidly backed digital tokens. What we are seeing is the increasingly rational use of digital tokens, which are becoming building blocks in the commoditization of tradeable assets."

Elaborating on the process, Tal said, "Tradomatics' extensive experience in supplying liquidity to conventional security exchanges, in supporting the introduction of a diamond-backed digital token, will result in the creation of a non-volatile financial asset with a high correlation to real-time prices in the diamond business."

"As such it will serve as an excellent hedge against the risks to which diamond traders are regularly exposed to in the currency markets. The CARAT token connects the Old World to the New World, integrating them and serving as a leader among the other backed digital tokens. I have no doubt that we are helping lay the foundation stone for a new financial market, and I am happy to be setting out on this journey with Carats.io," he added.