June 1, 2022
Verra, the Washington-based non-profit that sets voluntary carbon credit standards, said last week in a statement it will immediately prohibit the practice of creating instruments or blockchain tokens and based on retired credits.
Standard-setting organization Verra announced its intended approach to crypto instruments and tokens that are associated with carbon credits from its flagship Verified Carbon Standard (VCS) Program, the world’s largest carbon crediting program.
Verra will, effective immediately, prohibit the practice of creating instruments or tokens based on retired credits, on the basis that the act of retirement is widely understood to refer to the consumption of the credit’s environmental benefit. This announcement follows Verra’s statement on 25 November 2021 emphasizing that entities engaging in this activity do so entirely at their own risk.
Instead, Verra intends to explore the possibility of “immobilizing” credits in accounts in the Verra Registry so that they can be tokenized with the transparency and traceability that market participants demand, provided that this can be done in a way that prevents fraud and upholds environmental integrity.
Verra announced its intention to launch a public consultation on this subject, with a specific focus on:
- What enabling measures should be implemented to responsibly associate Verra instruments with crypto instruments or tokens, such as custody or keyholder arrangements;
- What know-your-customer (KYC) checks should be conducted on issuers and/or holders of crypto instruments or tokens;
- How the Verra Registry Terms of Use should be amended;
- What fee schedule, if any, is appropriate for Verra to charge in relation to crypto instruments and tokens.
The launch of the consultation will be announced on Verra’s website www.verra.org.
Verra is a nonprofit organization that operates the world’s leading carbon crediting program, the Verified Carbon Standard (VCS) Program, as well as other standards in environmental and social markets. Verra is committed to help reduce greenhouse gas emissions, improve livelihoods, and protect natural resources by working with the private and public sectors.
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