IBM has partnered with an environmental tech start-up to turn carbon credits — tradable instruments aimed at reducing greenhouse gas emissions — into digital tokens.
The tech giant announced on Tuesday that it is working with Veridium Labs, a firm that creates environment-related cryptocurrencies, to make it easier to trade carbon credits using blockchain technology.
Blockchain, also known as distributed ledger technology, is most popularly known as the tech that underpins cryptocurrencies like bitcoin. It enables participants to register transactions across a vast network of computers.
But, increasingly, firms in other sectors are showing an interest in distributed ledger because of its ability to handle massive amounts of data within a transparent, immutable network.
Veridium will use IBM’s technology to issue and manage carbon credit-backed tokens on the blockchain network created by Stellar, another start-up IBM has been working with. IBM said the carbon credit tokens will be fungible, meaning that they can be exchanged for another asset of the same type.