IBM’s investment in blockchain technology continues to expand with the announcement of its new partnership with Veridium, an environmental tech startup. Veridium will be using IBM’s technology to issue and manage carbon credit-backed tokens on the blockchain networks.
Let’s unpack that one.
Carbon credits are tradable credits that dictate how much carbon dioxide a company or government can release into the atmosphere. These credits are already traded, but Veridium and IBM think there’s a way to improve the system.
“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,” explains Jared Klee, director of digital asset registry at IBM.
Veridium allows companies to trade these credits over a secure blockchain network powered by Stellar, another IBM startup partner. By turning these carbon credits into digital tokens, Veridium and IBM help simplify the process of trading tokens and allow companies to exchange them for another asset of the same type.
This partnership is just a piece of the substantial investment IBM is making in blockchain technology, hedging its bet blockchain will only increase in importance as it continues to enter new partnerships and invest in new blockchain technologies.