KlimaDAO Japan intends to launch a new marketplace for carbon credits, to be called KlimaDAO Japan Market. It has joined the Progmat stablecoin platform to study the trading of carbon credits by companies and local governments using a Progmat stablecoin. The project may eventually expand globally.
KlimaDAO, a decentralized autonomous organization devoted to fighting climate change, foresees the KlimaDAO Japan Market eventually trading J-Credits carbon credits, launched in October on the Tokyo Stock Exchange. Trading may gradually expand to a global scale on Carbonmark, where KlimaDAO is already active, according to a statement.
J-Credit trading volumes remain “limited” so far. The international market for carbon credits amounts only to $2.9 billion, of which only $288.1 million is voluntary credits, according to the statement. It predicted that the world market may reach $172.9 billion by 2030, with Japan accounting for $1.9 billion of that sum.
Progmat was founded with the backing of a consortium of banks headed by Japan’s largest bank, Mitsubishi UFJ Financial Group (MUFG) through its Mitsubishi UFJ Trust and Banking. KlimaDAO will settle trades using yen-pegged JPYC coin for trading on infrastructure provided by Optage, a telecommunications company that operates in the Kansai region.
Related: Progmat stablecoin platform takes shape as wallet, liquidity providers join
The partners are beginning the second phase of their study, after getting the pieces of the ecosystem in place by April. Now, JPYC will be registered as an electronic payment method, and Mitsubishi UFJ is preparing to serve as the coin trustee. Phase 2 is expected to be completed by yearend and service can begin then. Integration with Carbonmark will also begin.
In Phase 3, overseas trading will start and support will be provided for financial institutions and companies to develop their own marketplaces.
Binance and MUFG announced a study in September to use Progmat for the issuance of yen-pegged and other types of stablecoin. The issuance of stablecoins in Japan became possible under regulations put in place in June.
Billionaire Mark Cuban is among the KlimaDAO backers. The permissionless protocol operates on the Polygon network, which pledged to go carbon neutral in 2022.
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