Introducing Project Diamond: Revolutionary blockchain-based debt instruments
Coinbase Asset Management has unveiled Project Diamond, a groundbreaking platform designed specifically for institutional investors to issue and trade blockchain-based digital debt instruments. This innovative project, developed by Coinbase Asset Management and powered by its Ethereum scaling network, Base, incorporates several essential components. These include Coinbase Prime’s custody service, the exchange’s web3 crypto wallet, Circle’s USDC stablecoin, and the layer-2 network Base. Together, these elements combine to create a capital marketplace that operates entirely on the blockchain.
Project Diamond has already made significant progress by receiving in-principle approval from the Financial Services Regulated Activity of Abu Dhabi Global Market. In fact, it has successfully issued and distributed its first debt instrument, a short-term discount note denominated in USDC stablecoin. This transaction was executed on Base, showcasing the platform’s capabilities to Abu Dhabi regulators.
At present, Project Diamond is available to registered institutional users outside the United States. This launch comes at a time of fierce competition to integrate traditional financial assets such as bonds and credit into blockchain systems. This process, known as the tokenization of real-world assets (RWAs), is expected to enhance settlement speeds, reduce operational costs, and increase transparency. According to asset management firm 21.co, the market for tokenized RWAs is projected to reach $10 trillion by 2030.
What sets Project Diamond apart is its ability to create digitally native assets directly on the blockchain. This represents a significant evolution from the mere tokenization of existing instruments. Shaun Martinak, Head of Infrastructure Development at Coinbase Asset Management, highlights the advantages of this approach, emphasizing the efficiency of creating and maturing assets entirely on-chain. Coinbase’s goal is to bridge the gap in global assets that are currently not represented on blockchain infrastructure, which currently stands at less than 0.25%.
It is clear that Coinbase sees tokenization as a crucial component of the crypto market in the next two years. With Project Diamond, they are leading the way in revolutionizing the financial industry and creating new opportunities for institutional investors.
