IBM (NYSE:IBM) is partnering with Veridium Labs based in Hong Kong to apply blochchain so as to boost efficiency in the carbon-credit market as well as simplify the whole process of offsetting carbon credits.
Facilitating trading of carbon on open market
For a long time, Veridium Labs has been struggling to crack the question of how to trade carbon offset credits in an open market. The main challenge is that complex credits do not have a simple value attached to it like a normal stock and for a long time, there has been no formula to establish individual value. This has largely made it hard or impossible to trade them in an open market. Veridium believes that this problem will finally be solved using blockchain and tokens.
In the partnership between Veridium and IBM, the two companies will sell carbon offset tokens on the stellar blockchain. Each company has a predefined role to play in the partnership and Veridium will be in charge of developing the structure as well as defining the value formula. Stellar will act as a digital ledger on which tractions are conducted and IBM will be in charge of handling the nuts and bolts of buying, selling and managing the tokens.
IBM is working on developing its blockchain program
The new initiative adds meaning to IBM’s wider plan of expanding its growing blockchain development which it envisions to improve transparency and business integrity. Recently, the company announced that its distributed ledger technology would allow Helzberg Diamonds, U.S retail jeweler to track its diamonds on the supply chain so as to establish and easily verify authenticity.
In addition to the social initiative, the partnership will help in fixing and inefficient and costly market. IBM blockchain offering manager Jared Klee said that a market with no centralized exchange for trading carbon footprints is bound to fail. He added that the technology will allow companies that are interested in trading their carbon footprint to do so with a lot of ease.
Veridium Labs chairman, Todd Lemons, said that for a long time, many companies with the best intentions have found it hard to account for complex carbon credits and this system will help to get rid of the problem.