IBM is partnering with Veridium Labs, a technology startup focused on environmental preservation, to issue a cryptocurrency token on the Stellar blockchain. The partnership was announced on May 15, making it IBM’s first ever cryptocurrency token. The collaboration between IBM and Veridium is geared towards transforming carbon credits into fungible crypto tokens. This move is yet another example of the innovative ways in which corporations around the world are leveraging the technology behind bitcoin to solve a multitude of problems plaguing the planet.
Tokenizing the Carbon Credit Ecosystem
The tokens called “verde” which will be issued via the Stellar public blockchain will enable businesses to manage their carbon credits by supporting conservation efforts in the Rimba Raya Biodiversity Reserve on the Borneo island in Indonesia. Carbon credits are permits given by the government to businesses allowing them to emit a certain amount of carbon dioxide into the atmosphere. This carbon emission concession is aimed at reducing the overall carbon footprint by restricting the allowable emission levels to an equivalent ton of carbon dioxide. IBM and Veridium are hoping to tokenize the carbon credit ecosystem. Commenting on the plan, IBM digital asset registry director, Jared Klee said:
“Right now, if you look at the carbon credit market — specifically the voluntary carbon credit market — they’re traded through bilateral agreements which means there’s a lot of friction involved. They’re not fungible assets, [and] you see that in pricing that one can be very different, the same asset with large price fluctuations between two of them. And we see that reflected in other places like secondary volumes and what not.”
Veridium will leverage IBM technology for the issuance and management of verde, the carbon credit-backed cryptocurrency token. The tokens will be issued on the Stellar blockchain network, a blockchain startup with a history of collaboration with IBM. The verde crypto tokens are fungible tokens which means they can be exchanged in lieu of another asset of the same type.
A Change of Plans
By partnering with IBM and issuing the tokens on the Stellar network, Veridium has altered its original plans which were focused on a collaboration with ConsenSys and tokens issued via the Ethereum blockchain. Veridium had initially announced the launch of such a project which was supposed to use tokens called TGR. However, it appears those plans have been scrapped, according to Todd Lemons, the founder of the startup company. No official word has been given for the change in plans, but the case could be made for the operational efficiency of Stellar over Ethereum.
IBM is at the forefront of leveraging the technology behind Bitcoin into diverse areas of the business process. Despite being interested in the business of cryptocurrencies, the company has been making noticeable strides in the blockchain arena. IBM has established blockchain test projects for segments like supply chain management (SCM) and logistics, striking partnerships with other large corporations like Maersk and Nestle.