Northern Trust, a financial services corporation, has implemented an institutional carbon credit ecosystem on its Northern Trust Matrix Zenith digital assets platform.
Northern Trust will serve as the custodian and record, transfer, and resolve digital carbon credit trades against “emission footprints” on the voluntary carbon market.
Smart contracts on the permissioned blockchain generate legal agreements that serve as the foundation for exchanging digital carbon credits for fiat currency, thereby “retiring” them.
The ecosystem encompasses the entire life cycle
With the participation of two project developers and three purchasers, including Northern Trust, the Northern Trust Carbon Ecosystem achieved the minimum viable product stage in September 2023. A comparable number of participants participated in the launch of the full version.
Justin Chapman, the global director of Digital Assets and Financial Markets at Northern Trust, stated that the system facilitates the entire digital asset lifecycle, including asset creation, pricing, trading, custody, and reporting. Additionally, he said:
“The Northern Trust Carbon Ecosystem is just one example of the current and future planned applications of Northern Trust Matrix Zenith. […] Leveraging blockchain technology, Northern Trust Matrix Zenith integrates with our core traditional asset servicing infrastructure to support digital and traditional assets side-by-side.”
A carbon credit denotes the reduction or eradication of one ton of carbon. It compensates for the carbon dioxide or other greenhouse gas emissions a project generates.
The initial carbon credit sellers on the new system were Water Recovery Systems IP, a small business in the United Kingdom, and CUT Carbon Distributed Technologies, a company based in Lichtenstein.
In June 2023, CUT introduced the Carbon Utility Token (CUT) to facilitate trading tokenized carbon credits on Arbitrum.
Northern Trust is one of Zodia’s co-founders
Northern Trust said the sole purchaser was Adapt Global Limited, a global telecommunications organization prioritizing sustainability.
For years, Northern Trust has been involved in blockchain initiatives. In 2018, it collaborated with PwC to implement on-chain private equity data administration and commenced the provision of digital asset custody.
It is also a co-founder of Zodia Custody and has collaborated on blockchain-related initiatives with SWIFT, EY, and other organizations.
