ANZ sees "tremendous growth" in tokenised carbon credit pilot

ANZ Banking Group says tokenised carbon credit pilots currently underway as part of the Reserve Bank (RBA)’s central banking digital currency (CBDC) program show “tremendous growth” potential.

In partnership with the Digital Finance Cooperative Research Centre (DFCRC), the RBA is leading a pilot project exploring how CBDCs could be applied within the Australian economy.  

ANZ, alongside the Commonwealth Bank, had three test cases selected, covering super fund payments, offline payments, and the tokenisation of carbon credits.

Speaking at the opening day of Blockchain Week in Sydney on Monday, ANZ banking services lead Nigel Dobson said its tokenised carbon credit study represents “an underserved market.”

“It's one that we believe will gain tremendous growth over the next several years," he said.

"Choosing a high growth, underserved financial market infrastructure seems to be an obvious sweet spot for development."

ANZ’s tokenised carbon credit targets institutional investors as the demand for nature-based assets such as carbon credits, biodiversity credits and sustainable agriculture practices, grows.

Dobson said that “illiquid and private markets” are also “underserved”, with both showing potential to be “unlocked through tokenisation”.

“That's really how we framed our exercise,” he added.

ANZ’s blockchain work has already extended to issuing its own A$DC stablecoin to purchase tokenised carbon credits through a private wealth management firm for digital assets, Zerocap, on behalf of Victor Smorgon Group.

It marked the bank’s second crypto transaction with Victor Smorgon Group, using A$DC to buy tokenised Australian Carbon Credit Units (ACCUs) known as BCAU from Zerocap.

One of ANZ’s other pilot projects involving offline payments in the event of any online outages was successfully tested when partners RMIT and Southern Cross University students bought coffees on campus using CBDC.