The first transactions were made on The Northern Trust Carbon Ecosystem, which allows institutional buyers to access digital carbon credits. Its aim is to make carbon offsetting accessible, convenient and more transparent. Last year, a minimum viable product was presented.
Two carbon projects, Water Recovery Systems IP and CUT Carbon Distributed Technologies, sold carbon credits to institutions in the first transaction.
The solution uses the new digital asset platform, Northern Trust Matrix Zenith.
“The Northern Trust Carbon Ecosystem is just one example of the current and planned future applications of Northern Trust Matrix Zenith – the latest step in our asset servicing innovation journey,” said Justin Chapman, Global Head of Digital Assets and Financial Markets at Northern Trust.
“It supports key events in the digital asset lifecycle, 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.”
Matrix Zenith uses a permissioned version of the Ethereum blockchain, Hyperledger Besu. All nodes are controlled by Northern Trust.
Aside from convenience and accessibility, one hope is that carbon credit tokenization could reduce the risk of double-counting of carbon credits. While this works on a single platform, a project could potentially try to tokenize or sell it on multiple platforms. The World Bank-backed CAD Trust aims to solve this problem by creating a blockchain log that aggregates data from multiple carbon registries. It went live in late 2023.
Northern Trust’s Blockchain Credentials
Northern Trust has considerable experience in DLT. In 2017, it developed a workflow platform for private equity funds, which it later sold to Broadridge to preserve its independence. It is a minority shareholder in Standard Chartered’s institutional custody platform Zodia Custody. It also provides a custody solution for BondbloX, a bond splitting solution. The company has also participated in several Swift blockchain trials.
Update: A previous version of this article stated that we suspected Northern Trust was using a different blockchain, but we were awaiting confirmation.
