Singapore’s OCBC Bank is making its first foray into digital assets with a partnership in green financing designed to help companies offset carbon emissions.
The second-largest bank in Southeast Asia said it would partner with MetaVerse Green Exchange (MVGX) to develop client companies’ energy transitions to carbon neutrality.
The partnership would enable OCBC’s corporate clients to offset their carbon footprints with the use of tokenised credits through MVGX.
MVGX plans to create an international network of carbon trading markets, enabling countries to meet the mandates laid out during the COP 26 United Nations Climate Change Conference.
OCBC said an independent party would verify the expected carbon emissions from projects utilising this financing, to calculate the corresponding carbon credits required.
Distributed Ledger Technology
The tokens are supported by a distributed ledger technology that provides an updated record of the carbon performance of the climate-action projects that they have invested in through these digital carbon credits.
“There will be increased urgency in corporates’ transition to a low carbon future by cutting down greenhouse gas emissions,” Elaine Lam, OCBC’s head of global corporate banking.
“We hope to accelerate these efforts by providing financing solutions with tokenised carbon credits.”
S&P Global has said the tokenisation of assets would continue to send shockwaves through traditional financial models, although “more as a complement than in competition with the incumbents for now”.
The rating agency warned that digitalisation of the economy also heightens the risk of cyber attacks with the potential to hurt corporates, governments, financial markets and economic growth.