The American multinational technology heavyweight IBM has partnered with environmental fintech startup Veridium Labs in a bid to tokenize carbon offset credits by releasing cryptocurrency token via the Stellar project’s blockchain.

Counterbalancing Carbon Footprints

IBM has previously worked with blockchain projects, but their new collaboration with Veridium Labs will entail the first time the company is getting involved in developing a cryptocurrency.

The joint initiative was just announced by Bridget van Kralingen, a Senior Vice President with IBM Industry Platforms and Blockchain. She noted:

“By using a public, permissioned blockchain network, we can help Veridium create a new sustainable marketplace that is good for business and good for the world. This is a great example of how industries are being reinvented by blockchain, in this case establishing a far more efficient and transparent approach to carbon accounting and offsetting that will empower individuals and companies to play a role in improving our environment.”

The initiative will automate “the entire complex process of carbon accounting and offsetting into a solution that can be seamlessly integrated into enterprise and consumer transactions using blockchain technology,” per Veridium Labs.

The crypto-to-be will be developed on the Stellar blockchain and is named “Verde.” The income from selling the token will be used to replant an area of Borneo’s Rimba Raya rainforest.

An Eco-Marketplace

The Verde token will be backed by environmental assets that include Triple Gold REDD+ credits through InfiniteEARTH, a company owned by EnVision Corp., Veridium’s parent incubator.

In reference to the joint initiative that aims to reduce the environmental impact of pollution-heavy companies, Veridium CEO Todd Lemons stated:

“For years, we’ve been trying to mitigate environmental impacts at every point in the value chain, however previous solutions still presented significant complexities and costs. Our digital environmental assets are designed to help companies and institutional investors purchase and use carbon credits to mitigate their environmental impacts today, and even hedge their potential carbon liabilities risks in the future.”

IBM, Stellar Back at It

It’s not the first time the computing giant has partnered with non-profit blockchain organization Stellar.

Last year, IBM joined forces with Stellar to use its native cryptocurrency, lumens (XLM), to clear and settle cross-border payments rapidly in a pilot project.

Recently, so-called “Big Blue,” as IBM’s popularly known, piloted a blockchain-based finance solution to offer microloans to small businesses throughout Africa.