KlimaDAO JAPAN launches carbon credit market

KlimaDAO JAPAN will begin a beta test of the blockchain-based carbon credit marketplace “KlimaDAO JAPAN MARKET.” In this test, OPTAGE will provide the corporate wallet, Mizuho Financial Group will provide practical support for the project, and PBADAO will provide project management and development support.

In this demonstration, KlimaDAO will utilize the smart contract “Carbonmark API” that is already in operation globally to verify the usefulness of a blockchain-based carbon credit tokenization market using Japan’s J-Credits. First, a trading demonstration will be conducted in a closed environment with only participating companies and local governments, with the aim of opening it to the public next spring.

In this demonstration, as a world first attempt, J-Credits will be tokenized on a public chain (hereinafter referred to as J-Credit Tokens) to enable trading. J-Credit Tokens will be issued as ERC-20 standard tokens on the Polygon blockchain, and one token will correspond to 1 t-CO2.

By utilizing blockchain technology, KlimaDAO JAPAN aims to increase the reliability and transparency of the carbon credit market and resolve the issues that existing carbon credits, including J-Credits, face (low liquidity, opaque transactions, complex procedures, etc.). Furthermore, by linking with a blockchain-based MRV (measurement, reporting, and verification) system, it is expected that in the future it will be possible to seamlessly carry out the entire process from credit issuance to distribution on the blockchain.

Carbon credits issued by blockchain are also programmable, and it is expected that they will be applied to various services. For example, it will be possible to create innovative services that were difficult to achieve in the conventional carbon credit market, such as automated transactions using smart contracts and stable coins, credit division and integration, and even linking with other financial products. This is expected to contribute to the revitalization of the carbon credit market and the realization of more flexible climate change measures.

In the future, KlimaDAO JAPAN aims to promote the democratization of carbon credits by making the platform available for buying and selling not only for corporations but also for individuals, creating an environment in which everyone can contribute to the environment with peace of mind. We also aim to integrate our services with the global marketplace

About the demonstration experiment:

A wide range of corporations will participate in this demonstration as sellers and buyers of J Credits. KlimaDAO JAPAN welcomes the participation of various types of corporations, including not only companies and local governments, but also NPOs, general incorporated associations, and educational institutions. The demonstration period is scheduled to run until the end of February 2025.

The main contents of the demonstration experiment are as follows:

• Seller: The J Credits held will be tokenized (JCredit Tokens) using smart contracts and listed for sale on KlimaDAO JAPAN MARKET.
• Buyer: Purchase J-Cre Tokens and store J-Cre Tokens in a Wallet; revocate via smart contract; receive the revocation certificate and store it in the buyer’s wallet; ransfer to J Credit Management Account; secondary sales

Currently, the following organizations have signed up to participate (in no particular order):

• Blue Lab
• Electric Power Development
• ENERES
• SoftBank
• Uhuru
• JPYC
• Decarbonization Support
• Sustineri
• TBWA HAKUHODO
• FINBEST
• Saikai City, Nagasaki Prefecture
• Nishikai Creative Company

KlimaDAO JAPAN is currently accepting applications from companies to participate in this demonstration project, and welcomes the participation of all companies that are interested in carbon credits, regardless of their size or industry. If you would like to participate, please contact KlimaDAO JAPAN.

Through this demonstration, KlimaDAO JAPAN aims to verify the effectiveness and issues of carbon credit trading using blockchain technology and build a more efficient and transparent market. This demonstration will also be an important step towards the public release in the spring of 2025, and KlimaDAO JAPAN will use the results of the demonstration to improve and expand the service.

About KlimaDAO JAPAN MARKET

KlimaDAO JAPAN MARKET is a digital carbon credit trading platform that runs on a public blockchain. It uses smart contracts from the Carbonmark API to enable the tokenization, trading, and retirement of carbon credits. By improving the transparency of transactions and streamlining procedures, it provides an environment in which anyone can participate in climate change countermeasures without borders.

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, on LinkedIn, or on Substack.

We also provide a daily short-form Japan FinTech Observer news podcast, available via its Podcast Page. Our global Finance & FinTech Podcast, “eXponential Finance” is available through its own LinkedIn newsletter, or via its 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.