Today, American stock exchange Nasdaq announced the launch of a new service for digital carbon credits.
The service is intended to digitize the issuance, settlement, and custody of carbon credits, which will aim to boost the scalability of the nascent carbon market.
The technology unveiled by Nasdaq relies on smart contracts for transaction security and is tailored to meet the needs of institutional investors.
Thus, by providing institutional-grade infrastructure that covers the full lifecycle of a carbon credits transaction, the exchange will hope to leverage its new service to increase liquidity.
Thanks to the flexibility of the novel solution, it can easily be integrated with existing financial systems, but it can just as well operate as a stand-alone platform.
To ensure that the new service receives the needed support, Nasdaq partnered with Puro.earth, the world’s leading carbon crediting platform for engineered carbon removal.
The partnership will see Nasdaq’s technology applied to the Puro Registry for CO2 Removal Certificates (CORCs) and will modernize the platform’s Puro Standard.
In the light of the most recent scandals surrounding low-quality and faulty carbon credits, the reputation of the voluntary carbon markets (VCMs) has suffered quite the blow and is in dire need of better, more robust mechanisms to ensure transparency and credibility.
The implementation of technological solutions, such as the one offered by Nasdaq, will help bolster traceability and will prevent double counting in carbon projects, both of which are necessary to reach market standardization.