A Study On Carbon Currency Issuance Based On Blockchain

Studies on carbon currency started from the booming of international carbon trade markets,while digital currency and blockchain has become a hot research topic recently because of the bitcoin storm.Blockchain,as the underlying technology of bitcoin,can be applied to comprehensive areas,among which carbon currency is a possible one.However,no study yet combines the two topics.The paper starts with introducing the practical and theoretical background of carbon currency,followed by discussions about its nature as a form of currency.It concludes that carbon currency can fully perform basic functions of currency such as unit of account,means of circulation,store of value,means of payment,and world currency,and it is a unique currency as it has multiple natures as commodity,credit,financial product and super sovereign agreement and it has political,social and technical features as well.The emphasis of the paper is about issuance of carbon currency,including its origination,issuer,pegging mechanism and credit creation mechanism.For the first time it has pointed out the challenges of carbon currency issuance based on the author's carbon market practice,such as problems about data reliability,cost and efficiency and super sovereign trust intermediary.Then an analysis of blockchain technology indicates that it is right the solution to above challenges as blockchain network is decentralized,transparent and tamper-resistant.A case study about a carbon credit creation platform based on blockchain technology is used to prove blockchain can shorten the term,improve collaboration and decrease cost of carbon credit creation.This paper is the first attempt to integrate carbon currency and blockchain technology in academic research.