JP Morgan Chase tests tokenized carbon credits system as crypto involvement deepens

JP Morgan Chase is working on a new approach for tokenized carbon credits. Kinexys, the bank’s blockchain unit, is partnering with S&P Global Commodity Insights and other carbon experts to offer tokenized carbon credits.

JP Morgan Chase and its on-chain unit Kinexys will launch a pilot program for tokenized carbon credits. The bank’s move deepens the reach of RWA tokenization, linked to a growing global market. 

The US bank will partner with S&P Global Commodity Insights, EcoRegistry and the International Carbon Registry to tokenize carbon credits listed in registry systems. 

“The voluntary carbon market is ripe for innovation,” said Alastair Northway, head of natural resource advisory at JPMorgan Payments. 

“Tokenization could support development of a globally interoperable system that adds confidence into the integrity of the underlying infrastructure. This technology could support greater information and price transparency, which could ultimately lead to greater liquidity in the market.”

The companies will oversee the movements of credits and explore whether blockchain technology can be applied to tracking ownership and transactions from the initial issuance of credits to their retirement. 

Tokenized carbon credits seek to improve efficiency in trading

JP Morgan Chase has been one of the leading mainstream banks to offer various forms of tokenization, mostly targeted at its clients. The bank recently prepared to launch its patented JPMD deposit-based token on the Base chain.

Tokenization remains a trend among mainstream financial companies as a more efficient tool for settlement and proof of ownership. A tokenized form of carbon credits can streamline inefficiencies and offer a standard way of tracking ownership. JP Morgan Chase hoped for a single tokenized carbon ecosystem where credits are seamlessly moving between sellers and buyers, with no need for central settlement. 

Carbon credits represent one metric ton of emissions, either removed or not added to the atmosphere. The tokens would represent the so-called carbon offsets that are required of some polluting businesses. 

As of 2025, the global carbon credit market is valued at $933.23B and is  expected to reach trillions by 2030. The market still faces some skepticism due to allegations of greenwashing without actually supporting reduced pollution. 

On-chain projects offer informal tokenized carbon credits

Tokenized carbon credits are one of the use cases for a whole class of blockchain projects. So far, tokenized carbon trading has happened informally, with no unified standard. 

The tokens offering exposure to the carbon offset market are also known as Regenerative Finance (ReFi). Currently, their value is low compared to other narrative tokens, though there is some demand for tokenized ecological projects. 

Since carbon credits are often the provenance of big business, there are few platforms to offer more reliable tokenization and settlement. The involvement of JP Morgan Chase may be the jolt the carbon credit on-chain market needs to start a new drive toward a common standard.

The main driver of demand for carbon credits is the net-zero commitment, which some of the world’s largest companies have made. The cut-off date of 2030 is just five years away, sparking expectations of suddenly rising demand for carbon offsets.

Carbon offsets can range between $1 to $100 per ton depending on the type of anti-pollution action and its efficiency. In the coming years, companies may have to expand their buying of offsets to meet the carbon emissions quota.

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