Veridium Labs, with assistance from IBM, has launched a blockchain network created to track how companies or other entities buy and sell carbon credits.
Investopedia explains carbon credit as "A carbon credit is a permit or certificate allowing the holder to emit carbon dioxide or other greenhouse gases". For context - a recent survey found that 63.4 million tons of carbon dioxide equals $191.3 million in carbon credits. There exists carbon markets where companies and large entities with emission processes, can buy and sell these credits. The International Panel on Climate Change (IPCC) introduced their carbon credit proposal as a market-oriented mechanism to slow worldwide carbon emissions.
"We're creating a fungible digital asset, a token which part of the goal is to create a market where people can buy, sell, trade and then redeem it for the underlying credits".
Carbon credits are not entirely new in their own right, but the process used in tracking the full extent of one's pollution, then providing a guarantee that the funds will actually go towards replenishing the environment is now hard to do. "By having a liquid market you open up a world of possibilities". "Our digital environmental assets are created to help companies and institutional investors purchase and use carbon credits to mitigate their environmental impacts today, and even hedge their potential carbon liabilities risks in the future".
The verde tokens will be backed by a company called InfiniteEarth.
The move marks the first instance of a multi-billion dollar tech corporation being directly involved in a token issuing process and lays the groundwork for such further occurrences. It sold its personal computing business to Chinese company Lenovo in 2005.
In a world where blockchain is getting highly accepted with time, many MNC's consider using the blockchain technology for the betterment of their company. Called the 'cryptographic anchor, ' it could be "embedded into products, or parts of products, and linked to the blockchain".
As it is known, IBM and Stellar have been already collaborating to create a global payment network powered by blockchain. Cryptocurrencies which were born out of an aim to decentralize the economy in its pursuit to become mainstream is becoming more and more centralized as companies, banks, and governments have started the use of cryptocurrencies and blockchain technology.
Here is where Stellar (XLM), IBM and Verdium Labs have figured out a cool way of simplifying the entire process on the blockchain.