MVGX co-founder on building a green exchange in S’pore

To say that cryptocurrency and blockchain expertise have earned a good bit of infamy lately is a little bit of an understatement. 

Cryptocurrencies have obtained vital consideration as an funding — a extremely risky one. In spite of everything, the final crypto crash was only a couple weeks in the past.

Nevertheless, a rising concern throughout the trade is the environmental impression of cryptocurrency mining. This can be very energy-intensive, and Bitcoin — the biggest cryptocurrency — consumes extra vitality yearly than your entire nation of Argentina (45 million individuals).

For sure, this has additionally raised some eyebrows, with Commodity Futures Buying and selling Fee Chair Rostin Behman suggesting that the vitality use outweighs the financial advantages of cryptocurrencies. 

Cryptocurrencies and blockchain expertise, whereas intently associated, should not the identical — cryptocurrencies are merely one use of blockchain expertise that occur to be reasonably eco-unfriendly. In the meantime, blockchain can be utilized for different functions.

One explicit firm, MetaVerse Inexperienced Alternate (MVGX) is taking blockchain expertise in a totally completely different route, endeavouring to make use of it to offer the sustainability trade a a lot wanted increase.

Combining inexperienced finance and blockchain tech

So how precisely can blockchain expertise be used to offer the sustainability trade a lift? 

Via my a few years in impression investing and expertise within the carbon trade, I’ve all the time had the ambition to see the day when inexperienced financing could be completed in a approach that permits transparency and excessive integrity, in order that buyers could be assured that their funding goes into actual inexperienced tasks which might be contributing to the atmosphere.

The world is turning into more and more digital in addition to with the rise of blockchain expertise — tokenisation would be the way forward for finance and investments. Blockchain expertise is subsequently the right selection for inexperienced financing as it’s immutable and unchangeable.

– Dr Bo Bai, Govt Chairman and Co-Founding father of MVGX

The important thing to that is MVGX’s personal Carbon Neutrality Token (CNT), hosted inside their very own Carbon Administration System. MVGX has already obtained a Capital Markets Companies Licence, and might present custodial companies for his or her Carbon Neutrality Tokens.

The tokens themselves are verified utilizing the British Customary Establishment’s (BSI) methodology, and the usage of blockchain expertise implies that data of carbon credit are everlasting.

Because of this conventional points with carbon buying and selling reminiscent of double counting are now not a problem. With many present carbon buying and selling techniques, studies of emissions reductions should not essentially verified earlier than they’re reported to related authorities. 

Nevertheless, that is the place MVGX sees blockchain expertise as having the ability to present a greater different.

With internationally recognised requirements and verification, firms are capable of acquire CNTs for his or her carbon emission reductions. Every CNT represents one ton of carbon emissions, and carbon emission reductions have to be verified by a certified get together earlier than a token is created to characterize it. 

The tokenisation of those carbon credit additionally solves one other difficulty for carbon credit score buying and selling regimes: scalability.

With blockchain expertise, carbon credit can now be traded throughout completely different regimes with ease, with the reassurance that these reductions are compliant with worldwide requirements.

Why inexperienced finance?

Whereas the Singapore authorities has all the time been fairly aware to not permit deliberate destruction of the atmosphere, with the Nationwide Atmosphere Company overseeing parks, greenery and different elements of environmental safety, there’s solely a lot that may be completed earlier than environmental safety comes on the expense of financial growth.

With inexperienced finance, buyers are capable of again firms and improvements that promise financial growth, monetary returns, and environmental safety on the similar time.

Efforts on sustainable growth have gotten more and more commonplace, and MVGX performs a key half on this effort.

Inside an more and more globalised enterprise atmosphere, companies, particularly these partaking in worldwide commerce, want to make sure that their ESG efforts don’t go to waste and are recognised on a world stage.

– Dr Bo Bai, Govt Chairman and Co-Founding father of MVGX

Bo welcomed this consideration, describing it as lengthy overdue, and cited the United Nation’s Intergovernmental Panel on Local weather Change (IPCC)’s newest report that discovered that local weather change is already worse than anticipated.

“As you possibly can think about, amid all the eye we’re seeing at this time, MVGX is uniquely positioned to handle a number of the ache factors that the sustainability sector faces when it comes to lack of transparency, whereas offering much-needed assist to each companies, governments, buyers, and sustainability tasks which might be attempting to fulfill their commitments over the subsequent few years,” he added.

The way forward for the sustainability trade in Singapore

This consideration has additionally introduced some successes for MVGX.

With such a promising innovation for blockchain expertise and inexperienced finance, MVGX has lately introduced a strategic partnership with OCBC Financial institution. The partnership is a part of OCBC’s strengthening of inexperienced financing choices for his or her company shoppers, and can convey companies on board to MVGX’s Carbon Administration System.

MVGX has additionally been exploring different partnerships, and has welcomed the electrical car carbon buying and selling scheme by CRX CarbonBank, deeming it a step ahead in the proper route. 

We predict potential carbon credit coming from this trade will likely be crucial, and given how digital and fragmented this trade is in comparison with centralised wind or photo voltaic farms, we expect our expertise is well-suited to characterize the property with integrity, and therefore, safeguard the integrity of the carbon credit score backed by it.

– Dr Bo Bai, Govt Chairman and Co-Founding father of MVGX

The corporate is already exploring potential enhancements to such a system, with asset-backed tokens to characterize fractional possession for buying and selling.

As Singapore strikes in the direction of a extra sustainable type of financial growth, widespread floor have to be discovered between companies, environmental curiosity teams, and the general public.

MVGX represents an enormous step in the direction of that consensus, with a viable technique of calculating carbon emissions, and the scalability to increase this to fulfill worldwide commitments in the direction of combatting local weather change.

Featured Picture Credit score: MVGX / Cash Compass