A stablecoin issued by one of Australia's largest banks, ANZ, was used to purchase tokenized carbon credits in a landmark transaction aimed at testing the asset's viability in carbon reduction instruments.
Victor Smorgon Group (VSG), a private investment firm that manages billions of Smorgon family assets, has purchased Australian carbon credit units in their tokenized form of the carbon trading platform. BetaCarbon, according to a statement on Sunday. BetaCarbon tokenizes Australian carbon credits into its BCAU token, each representing 1 kg of captured carbon.
“BetaCarbon is the first vendor to tokenize Australian Carbon Credit Units (ACCUs) using blockchain technology. Our long-term goal is to unleash more carbon sequestration and removal and increase the cost of CO2 emission to incentivize emission reductions across the economy,” said BetaCarbon CEO and Founder Guy Dickinson.
It’s the latest in the A$DC stablecoin, launched in March, which became the country’s first dollar-backed stablecoin issued by a bank – redeemable on a 1:1 basis for Australian dollars. In this case, A$DC was used to facilitate a $30 million pilot transaction using an Ethereum Virtual Machine (EVM) compatible smart contract. In the most recent transaction, VSG first sent a request to ANZ requesting the conversion of a certain amount of Australian dollars into A$DC. ANZ minted the equivalent amount and passed it on to the digital asset fund manager and custodian zerocap.
The fund manager then acted as the market maker for the carbon credit transaction for which a quote was requested on Circle's USDC stablecoin, BetaCarbon's preferred pair, before a market was created by Zerocap in A$DC/BCAU. on behalf of VSG. The transaction provided A$DC/BCAU liquidity while offering VSG and Zerocap redemption rights to A$DC, according to the release.
“Everyone involved, particularly ANZ and Zerocap, really want to expand the use of the [A$DC] stablecoin,” Zerocap CEO Ryan McCall told Blockworks in an interview. “Our thesis is that we will see the tokenization of everything, including bonds, stocks, properties, works.”
He said his company was demonstrating use cases for tokenized assets beyond cryptocurrency. Tokenization refers to the process of taking an asset and converting it for use in a particular blockchain. Zerocap also provided custody assistance to VSG in March, where the technology was praised for its processing speeds.
When asked about the security behind the transactions, Zerocap told Blockworks that they use various escrow technology platforms, including Fireblocks, for the creation and storage of private keys. The asset manager also said it has a bespoke insurance policy from Llyod's of London – one of the oldest and largest insurers in the world. Following the success of the deal, McCall said that Blockchain technology provides “irrefutable agreement” as well as “secure custody” and “frictionless transaction”.
“With Zerocap providing custody and creating a market for carbon credits with A$DC, we are proving how efficient a digital asset ecosystem can be for trading and settling an asset that most people don’t even associate with cryptocurrencies,” he said. McCall.
