JPMorgan launches blockchain tokenization for carbon credits

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🗞️ Driving the news: JPMorgan’s blockchain unit, Kinexys, has launched a pilot to tokenize global carbon credits, aiming to enhance transparency, standardization, and liquidity in the voluntary carbon market (VCM)
• In collaboration with S&P Global Commodity Insights, EcoRegistry, and the International Carbon Registry (ICR), the initiative uses blockchain technology to create a unified, interoperable platform for carbon credits trading and record-keeping

🔭 The context: The VCM has grown rapidly as companies use offsets to complement decarbonisation efforts, but it remains fragmented and plagued by inconsistent standards and weak transparency
• Blockchain’s distributed ledger capabilities are increasingly being tested as a solution to track credit issuance, transfer, and retirement reliably
• Kinexys builds on JPMorgan’s expanding digital assets and payments expertise, reflecting growing institutional interest in climate-aligned financial infrastructure

🌍 Why it matters for the planet: Improving trust and efficiency in the carbon markets is critical to directing capital toward credible emissions-reduction projects
• Tokenization could help mitigate current criticisms of the VCM — such as double-counting and unverifiable claims — while potentially increasing market liquidity and scalability
• A more robust VCM could accelerate climate finance flows to hard-to-abate sectors and nature-based solutions

⏭️ What's next: Following successful initial tests by EcoRegistry and ICR, S&P Global will begin its own trials on both its Environmental Registry and Meta Registry platforms
• JPMorgan and its partners plan to refine technical compatibility and functionality before moving toward wider implementation
• Broader stakeholder engagement and regulatory dialogue will likely shape the path to operational deployment in the coming years

💬 One quote: “Tokenization could support development of a globally interoperable system that adds confidence into the integrity of the underlying infrastructure,” — Alastair Northway, Head of Natural Resource Advisory at JPMorgan Payments

📈 One stat: The voluntary carbon market is projected to grow to over $50 billion annually by 2030, making infrastructure innovation critical to its credibility and scale

See on illuminem's Data Hub™ the sustainability performance of JPMorgan Chase and its peers UBS, Citi, and Goldman Sachs

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