Blockchain technology doesn’t seem to be disappearing anytime soon. Despite the cryptocurrency market experiencing significant losses over the past couple of months, with major cryptos such as Bitcoin and Ethereum losing more than 50% of their value, the use of the underlying blockchain technology around the world is on the rise. Last week, a World Bank affiliate announced that it was backing a blockchain-based platform to facilitate carbon trading.
Carbon trading is a system that allows enterprises to emit a certain level of carbon dioxide with the goal of reducing emissions over time by buying permits and credits. International Finance Corp (IFC) is hoping to rein in support from institutional investors who are interested in backing climate-friendly projects in emerging markets. The World Bank affiliate plans on taking advantage of the carbon offsets to a greater degree compared to traditional methods by leveraging blockchain’s decentralized nature.
These carbon emission credits may allow companies to emit a certain level of carbon, but they are almost always backed by green projects meant to compensate for these emissions, such as by creating wind or solar power as well as planting trees. And while a couple of financial technology companies have begun turning these carbon offsets into cryptocurrencies, concern about the origin and environmental impact of these digital tokens has kept them from gaining traction with institutional investors and companies.
Dishonest players in the crypto market are famous for scamming investors, after all, and blockchain has been criticized for using too much energy. Bitcoin was famously estimated to use more energy than the entire country of Argentina annually. Now that the IFC is incorporating blockchain, Verra, which runs the largest carbon credit registry in the world, has stated that retired carbon offsets will not be tokenized.
Furthermore, a spokesperson from IFC revealed that the World Bank affiliate would only source, tokenize and sell unused credits from established registries that had passed its additional quality checks. It has partnered with biodiversity investor Cultivo and blockchain firm Chia Network to create the Carbon Opportunities Fund and provide the blockchain carbon offsets.
The fund, which was seeded with $10 million, will purchase carbon credits from projects specifically selected by Cultivo and Aspiration, tokenize them using blockchain technology from Chia, and use the World Bank’s Climate Warehouse database to track the tokenized carbon credits. Steve Glickman, president of Aspiration’s international arm, says that at this moment, only 10% of carbon credit projects would meet the fund’s conditions.
As major institutions such as the IFC embrace blockchain technology, the domino effect triggered is likely to cause companies such as Tingo Inc. (OTC: TMNA) to see growing consumer demand as confidence in this new technology grows.
NOTE TO INVESTORS: The latest news and updates relating to Tingo Inc. (OTC: TMNA) are available in the company’s newsroom at http://ibn.fm/TMNA
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