Digital carbon credits with settlement through domestic stablecoins

Mitsubishi UFJ Trust and Banking, Progmat, JPYC, KlimaDAO JAPAN, and Optage have begun a joint study to utilize the stablecoin “JPYC (Trust Type)” issued on the “Progmat Coin” platform for settlement of digital carbon credits (hereinafter D-carbon).

By linking the blockchain-based D-carbon marketplace “KlimaDAO JAPAN MARKET” to be launched by KlimaDAO JAPAN with the “Progmat Coin” platform, and Optage providing corporate infrastructure, highly transparent, reliable and efficient inter-company trading of carbon credits will be realized for the first time in Japan. Furthermore, by linking with KlimaDAO’s globally deployed marketplace “Carbonmark” and using various domestic stablecoins for settlement, the creation of global liquidity on a cross-border basis is aimed for.

Background and Purpose

The global carbon credit market is worth more than 39 trillion yen, of which the voluntary credit (VC) market where companies and individuals purchase carbon credits is about 450 billion yen, currently small in scale but potentially reaching a maximum of 27 trillion yen by 2030, making it a market with high growth potential. In Japan alone, the carbon credit market is projected to reach 3 trillion yen by 2030.

In Japan, while the Tokyo Stock Exchange launched a trading market for J-Credits in October 2023, trading volume remains limited at present. There are VC marketplaces in existence, but they have just started and liquidity is not particularly high yet. Amidst this, KlimaDAO JAPAN plans to launch a new D-carbon marketplace “KlimaDAO JAPAN MARKET” for J-Credits and Japan-originated VCs, utilizing the platform of the globally deployed D-carbon marketplace “Carbonmark”, providing phased access to global liquidity.

D-carbon refers to tokens issued on a globally accessible permissionless blockchain representing the claim rights for J-Credits etc. purchased by KlimaDAO JAPAN from companies and municipalities. Optage will provide corporate infrastructure needed to access and manage D-carbon on the blockchain, with fund settlement via bank transfer etc., aiming to first launch the market in an environment accessible for corporate participation in trading.

Please follow us to read more about Finance & FinTech in Japan, like hundreds of readers do every day. We invite you to also register for our short weekly digest, the “Japan FinTech Observer”, on Medium or on LinkedIn. Our global Finance & FinTech Podcast, “eXponential Finance” is also available through its own LinkedIn newsletter, or via our Podcast Page.

Should you live in Tokyo, or just pass through, please also join our meetup. In any case, our YouTube channel and LinkedIn page are there for you as well.