A Market for Crypto Carbon Offsets to Boom and Attract DeFi Entrepreneurs and Big Investors Like Mark Cuban | Currency News | Financial and business news

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It is worth listening to those who know forests best.

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Millions of credits for greenhouse gas emissions are now tied to new cryptocurrencies, according to a Wall Street Journal report, with the rapidly growing market attracting DeFi projects and investors like billionaire Mark Cuban.

Supporters say crypto can bring more transparency to carbon credits, which stem from projects like building renewable energy farms. Many companies buy them to offset their emissions. But while projects receive third-party certification, credits are traded on unregulated markets.

Among market players, the WSJ highlighted Toucan, a decentralized finance project that allows users who own carbon credits to link them to digital tokens called BCTs, which went live in October. BCT stands for Base Carbon Tonne and tokens can be traded on cryptocurrency exchanges.

More than 17 million carbon credits have been linked to BCT tokens, the WSJ said. And the tokens traded for up to $ 5.59 on Monday, according to CoinGecko, being worth around $ 95 million on crypto exchanges.

Toucan told the WSJ he is working to overhaul the voluntary carbon market in part by providing real-time price information and a public trading registry to track who can take credit for funding projects to improve the climate.

The report noted that BCT trading was driven by Klima, a separate crypto asset managed by KlimaDAO. The decentralized autonomous organization allows people to buy Klima tokens, which are traded on cryptocurrency exchanges, along with BCT tokens. The DAO then keeps the BCT tokens in its treasury, removing them from circulation. Over 14 million BCT tokens have gone this route and cannot be used for carbon offsets.

The WSJ reported that Klima’s mostly anonymous developers say their tokens are also helping the climate by reducing the availability of carbon credits and increasing their prices. In turn, this should make carbon offset projects more profitable and stimulate the creation of climate-beneficial initiatives.

But skeptics told the WSJ that Klima could actually reduce the transparency of carbon markets.

For its part, the nonprofit Toucan told the newspaper, while the creators of KlimaDAO are anonymous, “their actions are completely transparent,” and said that Klima had invested millions of dollars in projects to improve the climate.

Dallas Mavericks owner Mark Cuban said he owns Klima chips but declined to say how much or if he took advantage of them, according to the report.

“While the anonymity is not optimal and it is a learning experience, if it works the environmental impact could be significant,” Cuban told the WSJ.

The credits have been virtually tied to newly created cryptocurrency tokens and, with some market participants claiming the technology creates incentives for projects to help the climate, according to the WSJ report released on Monday. The massive amount of energy used in mining bitcoin has cast a bad environmental reputation on cryptocurrencies.

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