Kinexys, J.P. Morgan’s blockchain business unit, is developing a new blockchain application on Kinexys Digital Assets, the firm’s multi-asset tokenization platform, to help tokenize global carbon credits at the registry layer, J.P. Morgan said on July 2.
Exploratory testing is being done with S&P Global Commodity Insights, EcoRegistry and the International Carbon Registry (ICR).
EcoRegistry and the International Carbon Registry have successfully completed testing on their respective registry solutions. S&P Global Commodity Insights will start exploratory testing with its environmental solution Environmental Registry, a customizable registry-as-a-service platform to facilitate better full-lifecycle tracking and management of carbon credits; testing could also eventually include its Meta Registry®.
"Global carbon markets face challenges including inefficiencies and a lack of standardization, transparency and market fragmentation. A single, tokenized carbon ecosystem in which credits are portable between sellers and buyers supporting seamless means of settlement could contribute to addressing these barriers," J.P. Morgan said.
Alastair Northway, Head of Natural Resource Advisory at J.P. Morgan Payments, said, “The voluntary carbon market is ripe for innovation. Tokenization could support development of a globally interoperable system that adds confidence into the integrity of the underlying infrastructure. This technology could support greater information and price transparency, which could ultimately lead to greater liquidity in the market.”
All three companies will initially test the viability of carbon credit tokenization using the application under development on Kinexys Digital Assets, with the aim of enabling external stakeholders to read and action registry data more easily.
The testing will focus on account, project and credit lifecycle management, with specific objectives around technical connectivity, data model compatibility and complete functionality.
Additional information about Kinexys is available here.
