IBM to Launch World’s First Corporate-issued Token; Chooses Stellar’s Blockchain Platform
IBM’s created ripples in the crypto-sphere in October 2017 after famously using the the digital remittance startup Stellar’s native token, lumens (XLM), to settle a cross-border payment with zero fees instantaneously. The transaction may have impressed IBM executives on a deeper level, with the “big blue” announcing an arguably massive development for cryptocurrencies in general, and Stellar in particular.
The so-called ‘verde’ token is designed to support the growth of Indonesian rainforests to counteract the carbon-damage done by environmentally-damaging industries. The token serves a niche purpose and provides enterprises with a digital tool for ensuring carbon offsets.
Developed in partnership with carbon credits startup Veridium Labs Ltd., the “verde” token will be issued on the Stellar blockchain, and are designed to give enterprises that pollute the environment a way to offset that damage by supporting a patch of Indonesian rainforest.
For the uninitiated, carbon credits are a kind of “permit” that allows an organization or country to produce a certain amount of carbon each year. The “credits” can themselves be traded, thus allowing a company to “sell” its carbon-producing rights to another company.
The process is not new and has been historically recorded on paper or basic software. However, fully tracking the extent of one’s pollution and ensuring real-deployment of funds to balance the carbon difference remained a particularly opaque, and time-consuming process.
Moving the credit system to the robust and auditable Stellar blockchain creates an opportunity to tokenize the process, in addition to instantaneous settlements when required.
The project shall be led by Jared Klee, IBM’s blockchain manager, who adds the use-case can open a larger, more vibrant market that understands and realizes the potential of blockchain technology.
“We’re creating a fungible digital asset, a token which part of the goal is to create a market where people can buy, sell, trade and then redeem it for the underlying credits. By having a liquid market, you open up a world of possibilities.”
The Verde tokens would also contain embedded smart contracts, which would create an immutable accounting database and closely record a company’s carbon emission and offsetting process.
The move marks the first instance of a multi-billion dollar tech corporation being directly involved in a token issuing process and lays the groundwork for such further occurrences.
IBM to Use Stellar in Conjunction With Private Blockchain
Klee was quick to note out that the carbon enterprise token would make use of IBM’s permissioned blockchain as well.
As per Klee, the “public, permissioned” blockchain ensures participation in the tokenized carbon credit process is limited to those with regulatory requirements, as the product is essentially a carbon token buying/selling exchange market. Hence, IBM’s blockchain will serve as a permissioning framework to Stellar’s blockchain.
According to Klee:
“Not only does that help create stability for the Stellar network. But that allows us to work with Veridium as the issuer and create a point of review in the transaction flow before it gets committed to the ledger.”
The partnership may come as a surprise to crypto-enthusiasts, as IBM was earlier said to utilize the Ethereum blockchain, in partnership with ConsenSys, for use in a project.