From Unofficial Ansalon Wiki
Gems are a form of lightweight currency that you can carry and quickly exchange for cash at any Shops in the game.
Gem values are as follows:
Star Diamond: 1,000,000
Gems can be used as a light-weight currency (sell [type] to get quick cash).
They can also be used to charge staves for that boost mages love.
You can do anything you can with coins, with gems:
Drop 3 emeralds, get 4 opals pile, give ruby Joe etc.
Star Diamonds do NOT stay on your corpse, they go back to you, period.
These are the currency of building and can not be stolen/looted etc.
To see your current supply of all gems, type WORTH GEMS.