Yesterday, Singapore’s carbon exchange CIX and the Carbonplace network announced that the two bank-backed organizations had completed a series of proof-of-concept transactions for voluntary carbon credits. Both organizations use blockchain.

One of the goals of the pilot was to address compliance, or more specifically, know-your-customer (KYC) and anti-money laundering (AML) for participants, particularly emerging market organizations that sell carbon credits. The pilot demonstrated that the compliance process could be streamlined, leading to shorter settlement times.

Participants in the pilots included carbon credit sellers Carbon Growth Partners and Sustainable Carbon, as well as Pavilion Energy, NatWest and Itaú Unibanco on the buyer’s side.

Singapore-based CIX provides a marketplace for sustainable projects and carbon credit trading and was founded by DBS, SGX, Standard Chartered and Temasek in May last year.

Standard Chartered is also one of the nine banks behind Carbonplace, which also includes CIBC, National Australia Bank, Itaú Unibanco, Natwest, UBS, BNP Paribas, SMBC and BBVA. It has multiple functions, but mostly as a settlement network and plans to integrate with multiple markets. It also provides a rule book for transacting, acts as a distribution network, and provides a carbon credit wallet.

“Resilient, flexible and modern infrastructure that ensures trust, access and transparency is essential for carbon markets to grow and function effectively,” said Bill Gilbert, NatWest Director of Carbon Markets. “This dramatic improvement in fund settlement and counterparty risk assessment in a blockchain environment will be critical to taking the carbon market to the next level and unlocking its true potential for climate action at scale.”

ConsenSys is developing the Carbonplace blockchain infrastructure and the solution is expected to launch in early 2023.