Northern Trust is launching its Northern Trust Carbon Ecosystem with the first live transactions on the blockchain-based platform which enables institutional buyers to digitally access carbon credits from leading project developers.
The official live transactions were initiated by Water Recovery Systems IP Limited and CUT Carbon Distributed Technologies AG, which sold carbon credits to institutional buyers for retirement.
The ecosystem is powered by Northern Trust’s digital assets platform, Northern Trust Matrix Zenith, to connect institutional buyers with project developers focused on climate solutions to avoid, reduce, or remove greenhouse gases in the atmosphere. Supported by private ledger digital blockchain technology, buyers can purchase digital carbon credits directly from project developers and retire these against their emissions footprint. Northern Trust acts on instruction to record, transfer and settle digital carbon credits in its capacity as the designated custodian.
Pete Cherecwich, president of Asset Servicing at Northern Trust, said, “The Northern Trust Carbon Ecosystem supports the growing interest in the Voluntary Carbon Market by providing a digital lifecycle management capability for voluntary carbon credits. The seamless and secure settlement experience is designed to give project developers and institutional buyers confidence in their carbon credit transactions, with Northern Trust as the custodian.”
Northern Trust is working with several project developers on its project, including Water Recovery Systems IP Limited, a water purification and membrane technology company based in the United Kingdom (UK), and CUT Carbon Distributed Technologies AG, a carbon credit proponent company based in Liechtenstein.
Each project developer completed transactions on the platform, with CUT Carbon Distributed Technologies AG selling digital carbon credits to global telecommunications company Adapt Global Limited.
“The Northern Trust Carbon Ecosystem provides us with a set of solutions to securely transact in the Voluntary Carbon Market,” said Christopher Steele, company director at Water Recovery Systems IP Limited.
Northern Trust Matrix Zenith builds on Northern Trust’s experience with blockchain-based systems dating back to the first commercial deployment of blockchain technology for the private equity market in 2017, collaborating with BondEvalue to deliver integrated fractionalized ownership of fixed-income bonds for the BondbloX platform followed by partnering in the launch of institutional grade crypto asset custodian Zodia Custody.
Northern Trust Matrix Zenith is part of Northern Trust’s Digital Assets and Financial Markets group which combines the teams responsible for supporting the fast-growing digital asset markets and those dedicated to providing market access and insights across the traditional securities services markets. Further transactions on the platform are planned for later in 2024.
“The Northern Trust Carbon Ecosystem is just one example of the current and future planned applications of Northern Trust Matrix Zenith – the latest milestone in our asset servicing innovation journey,” said Justin Chapman, global head of Digital Assets and Financial Markets, at Northern Trust. “It supports key digital asset lifecycle events from asset creation, trading, pricing and custody to reporting. Leveraging blockchain technology, Northern Trust Matrix Zenith integrates with our core traditional asset servicing infrastructure to support digital and traditional assets side-by-side.”
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Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.