The Oversea-Chinese Banking (OCBC) and the Metaverse Green Exchange (MVGX), a Singapore-based green digital asset marketplace, announced on Monday that they are joining forces to take climate action.
The two companies said in a news statement that they will use tokenized carbon credits to promote green financing options for enterprises in hard-to-abate industries such as steel, cement, and chemical production.
The credits will be called MVGX Carbon Neutrality Tokens (CNTs) and will be supported by MVGX’s distributed ledger technology, which will enable companies to keep track of the carbon performance of the climate action initiatives they would invest in, according to the press release.
Bo Bai, MVGX’s Executive Chairman and Co-Founder, commented on the matter, saying, “Governments and businesses around the world have come to realize the limitations of the current systems for tracking and neutralizing carbon emissions. Thankfully, there is now a greater urgency to embrace new solutions that leverage technology to promote carbon reduction and finance green initiatives.”
Carbon credits have grown more popular as a means of mitigating climate change, particularly in sectors like shipping, steel, and energy, where it has been difficult to reduce emissions directly. Instead, by purchasing carbon credits, these corporations would invest in environmentally friendly projects, such as renewable energy projects. This would ultimately facilitate the reduction of overall pollution levels.
As stated in the release, the Monetary Authority of Singapore (MAS) has granted MVGX a market operator license.
According to a January 2021 report by consulting company McKinsey & Co., demand for carbon credits might increase by 15 times or more by 2030, and by up to 100 times by 2050, with the market possibly valued at more than US$50 billion in 2030.
It’s proven challenging to track carbon credits accurately in a way that avoids double-counting and cross-border trade concerns, according to OCBC and MVGX. CNTs will help alleviate this by allowing for more precise measurement of emissions and offsets. To calculate the credits required, an independent third party will verify predicted carbon emissions from individual projects.