Northern Trust plans to use its carbon credit platform in Australia’s Project Acacia tokenization trials. The bank wants to demonstrate the simultaneous settlement of the tokenized carbon credit transfer and payment using a conventional Australian bank account. To achieve this, it is collaborating with Swift for the simulation.
Project Acacia is an initiative aiming to explore tokenized assets and various types of tokenized money including wholesale CBDC, tokenized deposits and stablecoins. It’s run by the Reserve Bank of Australia in collaboration with the Digital Finance Cooperative Research Centre (DFCRC). Last week 24 use cases were selected for the project.
Northern Trust has developed its DLT-based Northern Trust Carbon Ecosystem, which it will use for the interoperability test.
“The evolution of tokenized markets hinges on our ability to link emerging asset types with traditional infrastructure,” said Justin Chapman, Group Head of Strategic Partnerships, Digital Assets and Financial Markets at Northern Trust. “By collaborating on Project Acacia, Northern Trust is helping to prove that delivery-versus-payment of tokenized assets is not a future ideal but a present-day reality.”
This interoperability challenge of integrating tokenized asset settlement with conventional payments is being tested in several other places, although often for wholesale settlement rather than commercial bank payment. For example, Europe ran a series of DLT settlement trials and is now planning a production offering. The UK has similar plans.
Meanwhile, Northern Trust has been involved in several blockchain initiatives, including tokenizing green bond data as part of Singapore’s Project Guardian and cross border trading of carbon credits as part of Hong Kong’s Project Ensemble. As one of the largest custodians in the world, with $17 trillionin assets under custody, it is also a founding shareholder in digital asset custody firm Zodia Custody.
