Blockchain-based carbon credit exchange launches in Germany | CoinDesk JAPAN

Tokenization trading project Neutral and German securities firm DLT Finance have built a blockchain-based platform for carbon credits. Carbon credits are financial instruments that represent forest or renewable energy products that companies can use to offset their carbon emissions.

This is not the first effort to leverage blockchain to improve the multibillion-dollar carbon credit market. However, this project is the first to launch a regulated trading platform for carbon credits.

“No one had built the market infrastructure to allow traditional traders to trade these assets,” said Neutral CEO Farouq Ghandour. The company is a “technology provider” and DLT Finance will provide the “regulatory backbone”.

This platform removes blockchain from the end user experience. Basically, users do not need to be aware of tokenization or decentralization. On the other hand, CEO Gandor said that the company aims to conduct large-scale transactions with much higher liquidity than decentralized exchanges (DEXs).

“There are many negative opinions about collaboration with DEX,” CEO Gandor said, explaining why the existing blockchain-based carbon market has not fully penetrated and the potential of a new platform. He said it is very important for financial institutions to have regulated counterparties.

｜Translation/Editing: CoinDesk JAPAN Editorial Department
｜Image: Shutterstock
｜Original text: A Crypto Carbon Credits Exchange Is Created in Germany