JPMorgan's Blockchain division collaborates with S&P Global to test a new carbon credit tokenization application.

According to The Block, JPMorgan's blockchain subsidiary Kinexys is collaborating with S&P Global and others to test carbon credit tokenization applications.

JPMorgan's blockchain subsidiary Kinexys is collaborating with S&P Global Commodity Insights, EcoRegistry, and the International Carbon Registry (ICR) to test its upcoming carbon credit tokenization application.

The cooperation aims to establish a unified carbon credit Token ecosystem to address the issues of fragmentation and lack of transparency currently present in the carbon market.

Carbon credits are a tradable permit that allows companies to emit greenhouse gases within a certain limit. These credits are generated by emission reduction projects such as renewable energy projects, afforestation projects, or carbon capture technologies.

"Tokenization helps to build a globally interconnected system, enhancing the integrity and trust of carbon market infrastructure." — Alastair Northway, Head of Natural Resources Consulting at J.P. Morgan Payments.

Currently, EcoRegistry and ICR have completed preliminary testing on their respective registration systems; S&P Global will also begin testing on its "registry-as-a-service platform" soon. According to the press release, these three companies will also evaluate the feasibility of using the application for carbon credit tokenization, although the tool is still in development.

The focus of the test will include:

Lifecycle management of accounts, projects, and carbon credits

Technical connectivity

Data model compatibility

Function Integrity Verification

At the same time, it has been reported that JPMorgan Chase plans to launch a deposit token similar to a stablecoin, named JPMD, and plans to issue it on the Base Blockchain network. If realized, this would mark Kinexys's first deployment on a public chain.