tl;dr
JP Morgan Chase, through its blockchain unit Kinexys, is launching a pilot program to tokenize carbon credits in partnership with S&P Global Commodity Insights, EcoRegistry, and the International Carbon Registry. This initiative aims to improve the efficiency, transparency, and liquidity of carbon c...
JP Morgan Chase is pioneering a new approach to tokenized carbon credits through its blockchain unit, Kinexys. Collaborating with S&P Global Commodity Insights and other carbon market experts, the bank plans to launch a pilot program aimed at enhancing the efficiency of carbon credit trading. This initiative marks a significant step in the expansion of real-world asset (RWA) tokenization within a burgeoning global market valued at $933.23 billion as of 2025, with expectations to reach trillions by 2030.
The partnership includes EcoRegistry and the International Carbon Registry to tokenize carbon credits registered on established systems. Alastair Northway, head of natural resource advisory at JPMorgan Payments, emphasized that the voluntary carbon market is primed for innovation. Tokenization could foster a globally interoperable system that enhances confidence in the integrity of the carbon credit infrastructure, supports greater price transparency, and ultimately increases market liquidity.
The pilot program will monitor carbon credit movements and explore blockchain's potential in tracking ownership and transactions from initial issuance to credit retirement. Tokenized carbon credits aim to streamline trading inefficiencies by offering standardized ownership tracking. JP Morgan Chase’s commitment to tokenization, including its recent efforts like the JPMD deposit-based token on the Base chain, underscores the banking giant’s role in promoting blockchain solutions to financial markets.
Carbon credits represent one metric ton of emissions either removed or prevented from entering the atmosphere, serving as offsets required by certain polluting businesses. The envisioned tokenized ecosystem would allow seamless transfer of these credits between buyers and sellers without central settlement, enhancing efficiency. Despite the market’s vast potential, skepticism persists due to concerns over greenwashing and the actual efficacy of emission reductions.
Until now, tokenized carbon credit projects have operated informally with no standardization. Known in some circles as Regenerative Finance (ReFi), these tokens currently hold lower value compared to other blockchain narratives but possess growing interest in ecological investment. Given that carbon credits often belong to large corporations, reliable platforms for their tokenization and settlement remain scarce. JP Morgan Chase’s involvement could catalyze standardization efforts, providing the market with needed credibility and structure.
The surge in demand for carbon credits is driven by widespread net-zero commitments from major corporations, with 2030 approaching rapidly. Carbon offset prices vary widely, from $1 to $100 per ton, depending on the nature and effectiveness of pollution mitigation efforts. Over the next several years, companies will likely increase their carbon offset purchases to meet regulatory quotas, potentially fueling a dynamic and evolving market supported by blockchain-based tokenization.