OCBC, one of Singapore’s largest commercial banks, said on Monday it partnered with local crypto exchange MetaVerse Green Exchange (MVGX) to issue crypto tokens linked to investments in environmentally friendly technology.
Under the partnership, the two will issue carbon credit tokens that can be purchased by companies to offset their carbon footprint. The proceeds from the token sale will be invested in green projects such as reforestation and renewable energy.
The tokens will be generated through a distributed ledger run by MGVX. They will also use blockchain technology to keep records of purchases and investments in green projects, and are set to launch later in the year.
The project is aimed chiefly at high-carbon industries such as energy, shipping and steelmaking, which face difficulty in reducing their environmental impact. Instead, such companies can purchase green tokens to offset their emissions.
OCBC’s first formal venture into crypto?
While the bank has expressed interest in using blockchain technology, Monday’s announcement marks one of its first formal ventures into the space.
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OCBC had last year outlined plans to open its own crypto exchange, amid growing crypto adoption in Singapore. But to date, it has released no update on its plans. But reports earlier this year suggested that the bank was looking to hire crypto and blockchain professionals.
The bank has also outlined a three-year plan to increase its digital presence, amid growing competition from digital lenders.
Singapore has among the friendliest laws for cryptocurrencies, making it a highly sought-after destination for crypto firms.
Crypto’s environmental impact
The green token issuance serves as an example of environmentally-friendly applications of crypto. The space is seeing growing criticism from lawmakers and investors over the high energy cost of mining.
Later in the day, the New York State Assembly will vote on banning crypto mining. The European Union had attempted a similar ban earlier this year, although it was narrowly voted against.
But pro-crypto voices argue that the space is headed largely towards renewable energy, while proof-of-stake blockchains consume very little energy.
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