The International Finance Corporation (IFC), a member of the World Bank, collaborated with an altcoin project. Thus, IFC will support a Blockchain-based platform for carbon offset transactions.
IFC collaborates with altcoin project Chia Network
The International Finance Corporation (IFC), a member of the World Bank Group focused on investing in less developed countries, has partnered with Chia Network (XCH), a blockchain platform with an emphasis on the energy industry, for the Carbon Opportunities Fund. According to Reuters’ report dated 17 August, IFC is collaborating to increase the support of institutional investors to climate-friendly initiatives in emerging markets. In this way, it supports an efficient Blockchain platform for carbon offset transactions.
IFC hopes that the adoption of Blockchain, a digital database of information that can be openly shared over a large decentralized network, will take the use of carbon offsets to a greater level than in more traditional ways. Businesses and other organizations will use these credits to offset the emissions attributed to them when calculating their carbon footprint. They support activities that compensate for emissions, such as planting trees or generating solar and wind power.
Fintech emerges with digital tokens that transform carbon offsets
In the past year, several fintech companies have been formed to convert carbon offsets into digital tokens. However, the market did not attract interest from companies and institutional investors due to concerns about the origin and environmental benefits of some of the traded loans.
As you follow on Kriptokoin.com, Blockchain technology is also criticized by those who are concerned about the environment due to its high energy consumption. Aspiration, a firm specializing in sustainable finance, and biodiversity investor Cultivo are joining a fund. The fund will offer Blockchain-based carbon credits derived from projects selected by the two mentioned organizations.
Benefits of carbon offsets
Carbon offsets allow businesses to fix the greenhouse gas emissions they are responsible for by taking loans from organizations that support initiatives such as tree planting and renewable energy generation. Paulo de Bolle, senior global director of IFC, said:
This new framework, which will use new Blockchain technologies, is an innovative way for capital markets to be fully involved in carbon credit trading in a transparent, secure, fair and beneficial way.
The $10 million Proof-of-Concept fund will be tokenized using Chia technology. It will then receive carbon credits from Aspiration and Cultivo, which will be tracked using the World Bank’s Climate Warehouse database. Due to its increased openness, it is possible that blockchain technology is the obvious choice for businesses dealing with carbon offsets. On the other hand, for many people, Blockchain was involved in cryptocurrency mining, the method by which new currencies are introduced into the network. That’s why it was tainted for being associated with energy-intensive mining.
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