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We develop the reduced phase space quantization of causal diamonds in $2+1$ dimensional gravity with a nonpositive cosmological constant. The system is defined as the domain of dependence of a spacelike topological disk with a fixed boundary metric. By solving the constraints in a constant-mean-curvature time gauge and removing all the spatial gauge redundancy, we find that the phase space is the cotangent bundle of $Diff^+(S^1)/PSL(2, \mathbb{R})$, i.e., the group of orientation-preserving diffeomorphisms of the circle modulo the projective special linear subgroup. Classically, the states correspond to causal diamonds embedded in $AdS_3$ (or $Mink_3$ if $\Lambda = 0$), with a fixed corner length, that has the topological disk as a Cauchy surface. Because this phase space does not admit a global system of coordinates, a generalization of the standard canonical (coordinate) quantization is required — in particular, since the configuration space is a homogeneous space for a Lie group, we apply Isham’s group-theoretic quantization scheme. The Hilbert space of the associated quantum theory carries an irreducible unitary representation of the $BMS_3$ group and can be realized by wavefunctions on a coadjoint orbit of Virasoro with labels in irreducible unitary representations of the corresponding little group. A surprising result is that the twist of the diamond boundary loop is quantized in terms of the ratio of the Planck length to the corner length.