Northern Trust has announced the formal launch of The Northern Trust Carbon Ecosystem™ with the first live transactions on the blockchain-based platform which enables institutional buyers to digitally access carbon credits from leading project developers.

The official live transactions were initiated by Water Recovery Systems IP Limited and CUT Carbon Distributed Technologies AG, which sold carbon credits to institutional buyers for retirement.

The live transactions follow Northern Trust’s successful milestone of completing fully automated transactions on the initial minimum viable product, announced in September 2023.

The ecosystem is powered by Northern Trust’s digital assets platform, Northern Trust Matrix Zenith, to connect institutional buyers with project developers focused on climate solutions to avoid, reduce, or remove greenhouse gases in the atmosphere. Supported by private ledger digital blockchain technology, buyers can purchase digital carbon credits directly from project developers and retire these against their emissions footprint. Northern Trust acts on instruction to record, transfer and settle digital carbon credits in its capacity as the designated custodian.

Pete Cherecwich, president of Asset Servicing at Northern Trust, said: “The Northern Trust Carbon Ecosystem supports the growing interest in the Voluntary Carbon Market by providing a digital lifecycle management capability for voluntary carbon credits. The seamless and secure settlement experience is designed to give project developers and institutional buyers confidence in their carbon credit transactions, with Northern Trust as the custodian.”

Northern Trust is working with a number of project developers including: Water Recovery Systems IP Limited, a water purification and membrane technology company based in the United Kingdom (UK), and CUT Carbon Distributed Technologies AG, a carbon credit proponent company based in Liechtenstein.

Each project developer completed transactions on the platform, with CUT Carbon Distributed Technologies AG selling digital carbon credits to Adapt Global Limited, a global telecommunications company that empowers circular and sustainable technology solutions.

Christopher Steele, company director, at Water Recovery Systems IP Limited, said: “The Northern Trust Carbon Ecosystem provides us with a set of solutions to securely transact in the Voluntary Carbon Market.”

Ethan Gilmore, co-founder, at CUT Carbon Distributed Technologies AG, said: “CUT Carbon Distributed Technologies AG is incredibly excited to be able to register and settle our carbon credits on Northern Trust’s institutional platform and we look forward to bringing more of our inventory to The Northern Trust Carbon Ecosystem.”

Justin Chapman, global head of Digital Assets and Financial Markets, at Northern Trust, said: “The Northern Trust Carbon Ecosystem is just one example of the current and future planned applications of Northern Trust Matrix Zenith – the latest milestone in our asset servicing innovation journey. It supports key digital asset lifecycle events from asset creation, trading, pricing and custody to reporting. Leveraging blockchain technology, Northern Trust Matrix Zenith integrates with our core traditional asset servicing infrastructure to support digital and traditional assets side-by-side.”

Pete Cherecwich added: “Northern Trust Matrix Zenith is an asset- and market-agnostic platform that allows us to support our clients’ digital asset strategies. This gives us flexibility to drive our focused developments in tandem with our broader collaborations with clients and industry stakeholders, helping us explore new opportunities while evolving with the rapidly changing marketplace.”

Northern Trust Matrix Zenith builds on Northern Trust’s extensive experience with blockchain-based systems dating back to the first commercial deployment of blockchain technology for the private equity market in 2017, collaborating with BondEvalue to deliver integrated fractionalized ownership of fixed-income bonds (2019) for the BondbloX platform followed by partnering in the launch of institutional grade crypto asset custodian Zodia Custody (2020/21).

Northern Trust Matrix Zenith is part of Northern Trust’s Digital Assets and Financial Markets group which combines the teams responsible for supporting the fast-growing digital asset markets and those dedicated to providing market access and insights across the traditional securities services markets. Further transactions on the platform are planned for later in 2024.

The Northern Trust Carbon Ecosystem is offered through The Northern Trust Company, Chicago.

Source: Northern Trust