Developed in partnership with carbon credits startup Veridium Labs Ltd., the "Verde" tokens will be issued on the Stellar blockchain, and are created to give enterprises that "pollute" the environment a way to offset that damage by supporting a patch of Indonesian rainforest. "Our digital environmental assets are created to help companies and institutional investors purchase and use carbon credits to mitigate their environmental impacts today, and even hedge their potential carbon liabilities risks in the future". This, he says, can be made possible by moving the process to a blockchain that can be audited much more easily while at the same time tokenizing the credits in the same way that Bitcoin does in terms of tokenizing monetary value.
IBM blockchain offering manager Jared Klee said that a market with no centralized exchange for trading carbon footprints is bound to fail. "By having a liquid market you open up a world of possibilities".
US -based multinational company IBM and Hong Kong's Veridium Labs have chose to join their forces and expertise with a view to utilize blockchain, the distributed ledger technology for enhancing the efficiency in the carbon-credit market and facilitating the process of offsetting carbon credits.
The move marks the first instance of a multi-billion dollar tech corporation being directly involved in a token issuing process and lays the groundwork for such further occurrences. IBM has never issued any tokens using a public blockchain before.
"This "public permission" model is what allows IBM and Veridium to create a market for the buying and selling of the tokenized carbon credits that will also be restricted to participants in accordance with regulatory requirements".
IBM will use Stellar for first crypto token on public blockchain
IBM is going to launch its first crypto-token. "Not only does that help create stability for the Stellar network". He added that the technology will allow companies that are interested in trading their carbon footprint to do so with a lot of ease. This is a sister company of Veridium Labs which counts PwC and Microsoft among its customers.
Last year, IBM joined forces with Stellar to use its native cryptocurrency, lumens (XLM), to clear and settle cross-border payments rapidly in a pilot project.
The verde tokens will be backed by a company called InfiniteEarth.
What the two blockchains have in common, though, is one of the reasons why the switch early on in development was so easy.
What is new here is the concept of turning these credits into tokens on a blockchain. For context - a recent survey found that 63.4 million tons of carbon dioxide equals $191.3 million in carbon credits. Hence, IBM's blockchain will serve as a permissioning framework to Stellar's blockchain.
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