The London Blockchain Conference was full of big announcements, but perhaps none bigger than Tokenovate’s partnership with Zero13 on the world’s first smart legal contract for voluntary carbon credit derivatives trades. The CEOs of the two companies joined CoinGeek TV to talk about the partnership and why it’s a historic moment for the BSV blockchain.
Richard Baker, the former CEO of TAAL, has been building Tokenovate over the past year. It offers a “lifecycle event management platform for the trading of financial instruments known as derivative contracts,” he told CoinGeek TV host Jon Southurst.
Tokenovate partnered with Zero13, a carbon credits and ESG real-world assets ecosystem owned by U.K. firm GMEX. Together, “we executed the first ever trades in the voluntary carbon credit markets on Bitcoin,” Baker revealed.
There already exists a carbon credit market where participants, from individuals to enterprises and governments, pay a certain amount to offset carbon dioxide or any other greenhouse gas emissions. The voluntary carbon credit market is more flexible and operates beyond mainstream compliance laws.
With the aim to achieve carbon neutrality, the carbon credits market has been growing rapidly and is today worth a billion dollars. McKinsey estimates the market will be worth $50 billion by 2030.
“It’s really important to organize this market,” GMEX CEO Hirander Misra pointed out.
Some of the challenges the partnership seeks to solve are double counting, where the same carbon credits are deliberately sold to multiple companies, and greenwashing, where fake credits are sold.
“Blockchain, and what we’re doing with BSV, is a solid way to solve these challenges and a classic use case for the technology,” Misra stated.
Trust is essential in the carbon credits market, he added. It can be the difference between one carbon credit costing $5 and another costing $500. With blockchain, users can verify the authenticity of the credits they purchase without having to trust any single entity.
Standardization is also critical, and the two firms have been working with the International Swaps and Derivatives Association (ISDA) to set market standards.
The contract is only possible on a blockchain network that is regulatory compliant, Baker added.
“This [BSV blockchain] network is built for what we’re doing in a highly-regulated environment. If you’re trading the derivatives we have, you’re on economic and legal pathways, and there are obligations and fulfilments on both,” he stated.
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