Representative image.

SURAT: Soon, diamantaires in Mumbai and Surat will have to equip themselves with the 'blockchain' technology to enhance security and prevent conflict diamonds from entering the market.

The Kimberley Process Certification Scheme (KPCS), a global industry watchdog for clean trade in diamonds, is working on a pilot project that will use the technology to monitor the KP statistics globally. The move will help ensure permanent blockage of blood diamonds from war-torn areas to enter the mainstream market.

At present, the KPCS is chaired by United Arab Emirates (UAE). Ahmed Bin Sulayem, who is currently the chairman of KP has announced the blockchain initiative as part of his mid-term message assessing the KP's progress.

The blockchain is seen as a major technological innovation of Bitcoin, since it stands as proof of all the transactions on the network. A block is the 'current' part of a blockchain which records some or all of the recent transactions, and once completed goes into the blockchain as permanent database.

Blockchain is a list of transactions that take place in a peer-to-peer network. It enables users to share a digital ledger across a network of computers without the need for central authority to clear transactions, while making it impossible to tamper with records.

India is the world leader when it comes to import of rough diamonds. Being the world's largest diamond cutting and polishing centre, India imports around $16 billion worth of rough diamonds from various parts of the world.

While over 80% of the diamonds enter the country via the world's leading diamond mining companies including De Beers, Rio Tinto, Alrosa, etc, the rest is purchased from secondary markets in Dubai and Belgium.

The Kimberley Process (KP) was formed out of a meeting in Kimberley, South Africa in 2000, when the world's major diamond producers and buyers met to address growing concerns of smuggled diamonds fueling terrorism and civil wars - inspiration for the 2006 film Blood Diamond.

In India, the Gems and Jewellery Export Promotion Council (GJEPC) is the governing body for the KP certificates.

"Introducing the blockchain technology is a good move by the KP chair. We will get to know about the technology and its intricacies at the upcoming KP plenary meeting in November. But, we want to ensure that the council will always support the KP's decision to prevent blood diamonds from entering India," said regional chairman of GJEPC, Dinesh Navadiya.

