On Monday, OCBC, one of Singapore’s top commercial banks, announced a partnership with Metaverse Green Exchange (MVGX), a local cryptocurrency exchange, to issue crypto tokens connected to investments in environmentally friendly technologies.
Under the agreement terms, the two firms will issue carbon credit tokens that businesses may buy to offset their carbon impact. The token sale revenues will fund green initiatives such as reforestation and renewable energy.
MGVX’s distributed ledger will be used to produce the tokens. They plan to begin later this year and utilize blockchain technology to keep track of purchases and investments in green initiatives.
The effort primarily targets high-carbon sectors like energy, shipping, and steelmaking, struggling to reduce their environmental effect. Instead, such businesses may buy green tokens to offset their carbon footprint.
Is this OCBC’s first foray into crypto?
While the bank has previously indicated an interest in blockchain technology, Monday’s statement is one of its first official forays.
OCBC announced intentions to create its cryptocurrency exchange last year, citing rising cryptocurrency use in Singapore. However, it has yet to provide an update on its intentions. However, early this year, it was reported that the bank was recruiting for crypto and blockchain experts.
In the face of increasing competition from digital lenders, the bank has also laid out a three-year strategy to expand its internet footprint.
Singapore has some of the friendliest cryptocurrency rules, making it a popular location for crypto companies.
The environmental effect of cryptocurrency
The issuing of green tokens is an example of crypto’s ecologically beneficial uses. However, the high energy cost of mining is drawing increasing criticism from politicians and investors.
The New York State Assembly will vote later on whether or not to prohibit cryptocurrency mining. A comparable prohibition was proposed by the European Union earlier this year, but it was barely defeated.
However, crypto advocates believe that the industry is moving toward renewable energy, and that proof-of-stake blockchains use relatively little energy.