ANZ Bank’s Stablecoin Used to Purchase Tokenized Carbon Credits

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  • Zero­cap, a dig­i­tal asset man­ag­er and cus­to­di­an, act­ed as a mar­ket mak­er for the Vic­tor Smor­gon Group in a land­mark tok­enized car­bon cred­it transaction
  • It’s the lat­est use case for the bank-backed Aus­tralian sta­ble­coin fol­low­ing a $30 mil­lion pilot trans­ac­tion in March

A sta­ble­coin issued by one of Australia’s biggest banks, ANZ, has been used to pur­chase tok­enized car­bon cred­its in a land­mark trans­ac­tion aimed at bat­tle test­ing the asset’s fea­si­bil­i­ty in car­bon abate­ment instruments.

Vic­tor Smor­gon Group (VSG), a pri­vate invest­ment firm man­ag­ing the Smor­gon family’s bil­lions in assets, bought Aus­tralian Car­bon Cred­it Units in their tok­enized form from car­bon trad­ing plat­form BetaCar­bon, accord­ing to a state­ment Sunday.

BetaCar­bon tok­enizes Aus­tralian car­bon cred­its into its BCAU token, with each rep­re­sent­ing 1 kg of car­bon captured.

“BetaCar­bon is the first provider to tok­enize Aus­tralian Car­bon Cred­it Units (ACCUs) using blockchain tech­nol­o­gy. Our long-term objec­tive is to trig­ger more car­bon seques­tra­tion and removal and dri­ve up the cost to emit CO2 to incen­tivize econ­o­my-wide emis­sions reduc­tion,” BetaCar­bon CEO and Founder Guy Dick­in­son told Blockworks.

It’s the lat­est for the A$DC sta­ble­coin, launched in March, which became the country’s first dol­lar-backed sta­ble­coin issued by a bank — redeemable on a 1:1 basis for Aus­tralian dol­lars. In that instance, A$DC was used to facil­i­tate a $30 mil­lion pilot trans­ac­tion using an Ethereum Vir­tu­al Machine (EVM) com­pat­i­ble smart contract.

In the lat­est trans­ac­tion, VSG first sent a request to ANZ ask­ing to con­vert a set amount of Aus­tralian dol­lars into A$DC. ANZ mint­ed the equiv­a­lent amount and passed it along to dig­i­tal asset fund man­ag­er and cus­to­di­an Zerocap.

The fund man­ag­er then act­ed as the mar­ket mak­er for the car­bon cred­it trans­ac­tion where­by a quote was sought after in 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$DC/BCAU liq­uid­i­ty while offer­ing both VSG and Zero­cap redemp­tion rights for A$DC, accord­ing to the statement.

“Every­body involved, par­tic­u­lar­ly ANZ and Zero­cap, real­ly want to expand the use of the sta­ble­coin [A$DC],” Zerocap’s CEO Ryan McCall told Block­works in an inter­view. “Our the­sis is that we will see the tok­eniza­tion of every­thing includ­ing bonds, equi­ties, prop­er­ty, the works.”

He said his firm was demon­strat­ing use cas­es for tok­enized assets beyond cryp­tocur­ren­cy. Tok­eniza­tion refers to the process of tak­ing an asset and con­vert­ing it for use on a giv­en blockchain. Zero­cap also pro­vid­ed cus­tody assis­tance to VSG in March, where the tech­nol­o­gy was praised for its pro­cess­ing speeds.

When asked about the secu­ri­ty back­ing the trans­ac­tions, Zero­cap told Block­works they use var­i­ous cus­tody 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 world’s largest and old­est insur­ance underwriters.

Fol­low­ing the suc­cess of the deal, McCall said Blockchain tech­nol­o­gy pro­vides for “irrefutable set­tle­ment,” as well as “secure cus­tody” and “fric­tion­less transacting.”

“With Zero­cap pro­vid­ing cus­tody and cre­at­ing a mar­ket for car­bon cred­its with A$DC, we’re prov­ing how effi­cient a dig­i­tal asset ecosys­tem can be for trad­ing and set­tle­ment of an asset that most peo­ple don’t even asso­ciate with cryp­to,” McCall said.

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  • Sebas­t­ian Sinclair


    Senior Reporter, Asia News Desk

    Sebas­t­ian Sin­clair is a senior news reporter for Block­works oper­at­ing in South East Asia. He has expe­ri­ence cov­er­ing the cryp­to mar­ket as well as cer­tain devel­op­ments affect­ing the indus­try includ­ing reg­u­la­tion, busi­ness and M&As. He cur­rent­ly holds no cryptocurrencies. 

    Con­tact Sebas­t­ian via email at [email pro­tect­ed]

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