Yesterday Nasdaq’s Marketplace Technology division unveiled a new offering supporting carbon credit issuance, settlement and custody. It uses smart contracts and clients can deploy it on a centralized database or enterprise blockchain.
It also announced its first client for the technology, Puro.earth, which issues CO2 removal certificates.
Nasdaq cited a lack of digitization, automation and standards in the growing carbon credit sector. This presents a barrier to attracting capital.
“Fragmented technology choices in the trading and settlement of carbon credits has prevented the carbon industry from growing and maturing as an asset class. A lack of system flexibility, standardization, and connectivity has made it challenging for critical infrastructure providers and institutional investors to access the market in a meaningful way,” said Roland Chai, EVP and Head of Marketplace Technology at Nasdaq.
“Bringing institutional grade technology to underpin the market will drive ever-greater liquidity across carbon marketplaces and open the possibility of greater interoperability between registries in the future.”
Nasdaq has developed an expandable carbon taxonomy framework to contribute to the standardization process. Market operators, registries or custodians can deploy the solution standalone or integrate it with existing platforms.
The ability to use smart contracts combined with either centralized databases or blockchains signalled it uses Digital Asset’s DAML smart contract language, as confirmed by Nasdaq.
Meanwhile, yesterday we reported that French electricity giant EDF participated in a trial to automate renewable energy certificates (RECs).
