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illuminem summarizes for you the essential news of the day. Read the full piece on Euronews or enjoy below:
🗞️ Driving the news: A Swiss-South African startup has launched Toco, a digital currency backed by carbon credits, allowing users to pay for goods while offsetting their emissions
• Each Toco represents one metric ton of CO₂ removal and can be spent at select merchants in Switzerland and Denmark
• The system aims to integrate climate action into everyday transactions without compromising economic growth
🔭 The context: The Carbon Reserve, a Swiss non-profit, purchases carbon removal certificates with funds from Toco transactions, similar to how central banks hold assets
• The project operates on a permissioned blockchain, ensuring transparency while avoiding anonymous transactions
• Critics argue that linking volatile carbon and token markets could destabilize both and raise concerns over carbon credit verification
🌍 Why it matters for the planet: By embedding carbon offsets into daily spending, Toco could increase demand for carbon removal projects and strengthen voluntary carbon markets
• However, experts warn that poor oversight and questionable credit quality could undermine its effectiveness
• If successful, Toco’s model could influence future climate-focused financial innovations
⏭️ What's next: Toco plans to expand across Europe, with hopes of driving $50 billion in annual carbon credit demand if widely adopted
• Regulators and experts will continue scrutinizing its credibility, transparency, and market stability
• The broader carbon market must also address concerns over offset integrity and effectiveness
💬 One quote: “These coins are not the answer to our prayers to contain climate change. They just multiply financialisation of a common good instrument like the carbon certificates, adding volatility to both markets.” — Emilios Avgouleas, Chair in International Banking Law and Finance, University of Edinburgh
📈 One stat: Toco currently has 1,000 users in Switzerland and Denmark, with plans for European expansion
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