Tokenized Carbon Credits Market
Toucan Registry is a new company attempting to create a blockchain-based carbon credits registry. Toucan will be able to break down different carbon credit projects by quality and age, and tailor the resulting tokens to different buyers. The company is also launching a Nature Carbon Tonne pool for credit projects that benefit nature. The aim is to bring in crypto enthusiasts into the carbon market. It’s not yet clear what this project is about, but it’s a step in the right direction.
The blockchain-based carbon credits registry will improve the verifiability of the carbon market. Since trading carbon credits requires a dedicated account with a registry, it is not affordable for small buyers. Although many experts in the carbon market are supportive of the idea, they remain skeptical of the potential for it to work in practice. One major concern is the proliferation of poor quality digital credits. Ingo Puhl, co-founder of South Pole Carbon Offset, says, “I’m concerned that if we create a blockchain-based market that does the carbon offsets we need, the environment will suffer greatly.”
Environmentalists have been critical of the crypto industry, and their backlash has fueled fears of the crypto industry’s environmental impact. This industry is generating more emissions than it’s absorbing. However, with the advent of cryptocurrency and the blockchain, crypto mining operations will be more transparent. Toucan’s decentralized finance project has already paired carbon credits with digital tokens. The BCT stands for Base Carbon Tonne, and can be traded on any cryptocurrency exchange.
Blockchain-Based Crypto Tokenized Carbon Credits Market
The cryptocurrency market has many benefits. Security and traceability are the biggest concerns. In the old-fashioned carbon credits market, transactions are recorded in an unreliable way. This can lead to double spending and fraudulent activities. Tokenizing makes it possible to track and audit tokenized carbon credits in a more accurate manner. No one can double spend a token. Third-party companies are able to check the ledger of transactions and ensure that they are all genuine.
The Blockchain exchange can help to create trust in the carbon market. Anyone on a permissioned ledger will be able to verify the authenticity of each transaction. The technology also brings transparency to carbon credits. Toucan’s platform will allow users to link carbon credits to digital tokens. The BCT will be issued on the basis of a renewable energy certificate. The platform will offer a wide range of products and services to its customers.
The cryptocurrency market is a growing industry. It’s a regulated, transparent marketplace for carbon reduction projects. But it’s not yet a perfect solution. It may even cause more scams. But it’s definitely a start. Toucan Labs has developed a system on Polygon to create a blockchain-based carbon trading network. It works with the existing physical registry of carbon credits and helps bring transparency to the market.
