Editor’s Note
This article offers a glimpse into the secretive world of diamond trading in Ramat Gan, home to one of the globe’s largest exchanges. It reveals a unique culture where immense value is assessed with meticulous care, yet transactions are still sealed with traditional wishes of luck.
In Ramat Gan, rough and polished diamonds are traded. Anyone making a purchase first meticulously checks the quality of the expensive treasures.
The country is home to one of the world’s largest diamond exchanges. A visit to a glittering, secret world where traders still wish each other luck and blessings.
The yield lies in a small box lined with black velvet: five diamonds, and next to it in a blue box, 17 smaller ones. “For rings and a necklace,” says Dov Frei. These gemstones, which the diamond dealer acquired that day on behalf of jewelry producers, cost $15,000. He has placed a larger diamond in an envelope, called a ‘briefken’. The price? Frei prefers to keep that to himself.
His workplace is a table littered with papers almost in the middle of the hall in Ramat Gan near Tel Aviv. Anyone wanting to enter here must undergo strict security checks – the exchange is secured like Fort Knox, where the US gold reserve is stored. In addition to the usual checks known from airports, passports or, for Israelis, identity cards are retained. Visitors must have a special photo ID made, complete with their own fingerprint. The final revolving door towards the trading hall only opens when you insert the previously produced card into a reader and place your index finger in another. Only then does another world open up, the Bursa, the Diamond Exchange of Ramat Gan.
What six pioneers started in 1937 with the first trading and cutting work in what was then Palestine has developed into one of the most important economic sectors in Israel. About 20,000 people are employed in this industry. The annual turnover of the Israeli diamond industry recently amounted to $28 billion. However, its share of the total economic output has been declining for years. The gemstone business is not exactly hip at the moment. Even though they are proud in Tel Aviv to have the world’s largest trading hall for diamond trading, in terms of turnover, Antwerp and the competition founded only in 2010 in Mumbai are larger. For traders like Frei, it was clear: something had to happen.
Now, Israel’s economy is a global force not because of its diamond trade, but because of its startups. So it was obvious to “bring momentum into the business” through a startup, says Eli Avidar, the managing director of the exchange. Therefore, at the end of May, a new cryptocurrency was launched, intended to polish the exchange’s reputation and make the Bursa more attractive and modern again.
They are still two worlds: In the old world, many deals are still sealed with a handshake and without an invoice. In the new world, regulations for banks were tightened after the financial crisis, which also meant the diamond industry had to become more transparent. And now the Israeli Bursa wants to facilitate money transfers or credit lending within the diamond industry with a gemstone-based cryptocurrency. With the technology developed by the Israeli startup Carats.io, transactions can be confirmed within minutes and the data stored securely and encrypted in the blockchain.
In the management’s conference room, however, time seems to have stood still.
says exchange chief Avidar, pointing to the furniture from the sixties.
Lured by tax advantages, the exchange settled in Ramat Gan in 1966, in a neighboring town northeast of Tel Aviv, in the city’s first skyscraper. By now, there are four towers connected by bridges. The total area is 100,000 square meters with 2,200 rooms; 1,400 companies have branches here, and 12,000 people work in the building complex.
Once inside, you don’t need to go out for the most essential things: Under the same roof, besides restaurants, there are a synagogue and a clinic. The hairdresser and the dentist not only have their rooms next to each other in the basement but share the same first name: Avi. There is a club for retirees. On the first floor, Israeli banks reside next to a branch of the Indian National Bank. There are also counters of express services specialized in safely transporting the expensive cargo to other parts of the world. In this own cosmos, there is even a private telephone network; traders can reach each other on their mobile phones using short codes.
On a normal day, 600 traders bustle in the trading hall, trading with each other or searching for gemstones or trying to sell them on behalf of others. Like in a classroom, narrow black tables are lined up side by side; the space between the rows is wider so that a chair can be placed on the other side of the table as well. The hall is filled with a permanent murmur, but no one ever shouts loudly. Negotiations mostly take place in intense one-on-one conversations, bent over the table and the diamond.
