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Stablecoin pioneer Uphold claims to have launched the first tradable retail carbon token.
The Universal Protocol Alliance, a coalition of blockchain companies led by Uphold and including Bittrex Global, Ledger, Certik and Infinigold, announced the Universal Carbon (UPCO2) token on Tuesday.
Each blockchain-based UPCO2 token represents a certified measure of carbon dioxide. They can be bought and held as an investment or burned to offset the carbon footprint of a company or individual, the group said.
A rather overloaded term, “carbon credits” can refer to both government-issued credits traded on regulated markets, and voluntary carbon offsetting where credits can help remove emissions through tree-planting projects, for example. Blockchain technology has been touted as a way to prevent double counting (or double spending) of carbon credits across all areas and markets.
Read more: Carbon credits have a double spending problem. This Microsoft supported project is trying to fix it
Uphold is beginning tokenizing voluntary carbon credits, specifically REDD credits which are high quality, easy to understand and make up about 58% of the voluntary carbon market, explained JP Thieriot, co-founder of UP Alliance and CEO of Uphold. . Each UPCO2 token represents one tonne of CO2 pollution avoided by a certified REDD + project that prevents rainforest loss or degradation, he said.
Based on the Ethereum ERC-20 standard, the tokens are backed by a Voluntary Carbon Unit (VCU), a digital certificate issued by the international standards agency Verra, which allows certified projects to transform their greenhouse gas (GHG) reductions into tradable carbon credits.
Today, the voluntary carbon credits retail market – via sites like TerraPass or Cool Effect – allows for access, but not holding or trading, which is the important distinction, Thieriot said.
“We are the first people in the world to make these credits retail accessible and storable,” he told CoinDesk in an interview. “So there are many retail sites that allow you to compensate for the trip you just took to New Zealand or to give someone a smart Christmas gift. But they do not allow buying and holding for investment or speculative purposes “.
When he began to view voluntary credits as fungible assets, Thieriot expected that the prevailing “NGO mentality” would likely be skeptical of a project to exploit the speculative interest of a younger generation.
“Actually, every single conversation we’ve had, people get it. They all understood that if we can pull that trick out, it could change the world, ”Thieriot said.
Read more: Climate startup Nori raises $ 4 million to solve the double spending of the carbon market
Voluntary carbon offsetting is also interesting for companies like Amazon, Microsoft and Nike, said Thieriot, who is no longer interested in waiting for governments to take the lead and have set out to neutralize their current carbon footprint, or even their entire historical. imprint, on its own initiative.
Meanwhile, demand for carbon credits is expected to outstrip supply by a factor of four to one in 2020, according to the World Bank. And a shift in the political climate in the United States looks likely, with President-elect Joe Biden announcing a climate administration.
UPCO2 tokens must undergo a “cure process”, which is equivalent to a primary issue, said Thieriot, under which they will be made available from today on the Uphold platform.
“We will initially offer it on Uphold for about 4-6 weeks and then Bittrex Global will turn it on,” Thieriot said. “Besides, we would like every exchange in the world to collect them.”
