The promise and challenges of cryptocurrency technology for voluntary carbon markets
Cryptocurrency technology can play a significant role in revolutionizing voluntary carbon markets. The voluntary carbon markets (VCM), where companies and individuals trade carbon credits voluntarily, propel investment in carbon neutralization (removal) and compensation (avoidance and reduction) projects (McKinsey, 2021). The current VCM is complicated due to fragmented carbon standards, liquidity, and choices for corporate demand and retail. The existence of countless trading exchanges and an absence of clarity about the carbon offset quality also complicate the VCM’s expansion for climate-benefiting efforts (KlimaDAO, 2022).