ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Global Diversification
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Megatrends
    • Modern Alpha
    • Multi-Asset
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About Us
    • Swag Store
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. China Insights Channel
  2. Crypto Is Entering the Voluntary Carbon Markets
China Insights Channel
Share

Crypto Is Entering the Voluntary Carbon Markets

Karrie GordonJan 11, 2022
2022-01-11

As cryptocurrencies and the crypto industry increasingly look to go green, there are a growing number of carbon credits now tied to cryptocurrency tokens; more than 17 million metric tons of carbon offsets, to be exact, reports the Wall Street Journal.

Carbon markets are experiencing sustained growth as more industries turn to carbon credits to balance their emissions budgets. Some within crypto believe that the existing voluntary markets are not transparent or lack standards and create confusion for interested parties.

Their solution? Using blockchain technologies to create platforms such as Toucan to buy and sell tokens tied to carbon credits. It works by linking a Base Carbon Tonne (BCT), the native token, to a carbon credit provided by the user.

These tokens are then traded on crypto exchanges, providing real-time pricing as well as the ability to track trades and easily identify who can claim the funding credit for projects working to improve climate change.

Taking it one step further is Klima, a decentralized autonomous organization where BCT tokens are traded for Klima tokens, and then the BCT tokens are held indefinitely to take carbon credits off the market. Klima tokens are then traded on crypto exchanges where crypto investors can speculate on crypto assets that have been carbon-backed.

It’s a solution that isn’t without skepticism, though, in part because Klima founders are anonymous and in part because crypto itself is fraught with its own emissions issues.

“Secure, decentralized technology could go some way towards offering the transparency the voluntary market is looking for. However, the carbon footprint of crypto has to be clearly addressed before this can be credibly assessed,” said Luke Oliver, managing director and head of strategy for KraneShares.

KRBN Offers Exposure to the Compliance Mandated Carbon Markets

“It’s worth noting that the wrapping of carbon offsets into crypto tokens is happening in the voluntary offset space. The mandatory, compliance markets we (Krane) currently offer clients access to are already highly transparent and tracked via traditional methods,” explained Oliver.

For investors looking for exposure to the more regulated mandatory compliance carbon markets, the KraneShares Global Carbon ETF (KRBN ) offers a first-of-its-kind take on carbon credits trading and is in a position to capture the rise in carbon allowance prices as emissions limits become more stringent.

KRBN tracks the IHS Markit Global Carbon Index, which follows the most liquid carbon credit futures contracts in the world.

This includes contracts from the European Union Allowances (EUA), California Carbon Allowances (CCA), and Regional Greenhouse Gas Initiative (RGGI) markets. North American pricing data is supplied by IHS Markit’s OPIS service, while European prices are supplied by ICE Futures Pricing.

KRBN invests in its futures contracts via a Cayman Islands subsidiary, meaning that it can avoid distributing the dreaded K-1 tax form to its shareholders.

KRBN carries an expense ratio of 0.78% and has $1.7 billion in net assets.

For more news, information, and strategy, visit the China Insights Channel.


Content continues below advertisement

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X