Nasdaq and Climate Impact X (CIX) entered into a partnership to boost price transparency and liquidity in voluntary carbon credit market.
The agreement will allow CIX to leverage Nasdaq’s technology to power its spot exchange for quality carbon credits.
Nasdaq is a global tech company serving the capital markets and other industries. Over three thousand public companies trade on the Nasdaq exchange.
CIX is a global marketplace and exchange for quality carbon credits. It was born out of a joint venture between DBS Bank, SGX Group, Standard Chartered and Temasek.
This spot trading platform will launch in early 2023 for financial institutions and institutional investors globally.
CIX – Nasdaq Carbon Exchange Partnership
There are several factors that affect the price of carbon credits. These include the type of project that generates the credits and its location. Credit buyers value both factors in a different way.
It’s for this reason that differences in prices result in inconsistency in the market. In effect, there’s a key challenge when it comes to matching a buyer for a certain credit supplier. Plus, this process can also take much time, making the transaction inefficient.
This is where the CIX and Nasdaq partnership comes in to address the issue.
CIX’s Enabling Role
CIX’s spot exchange will match buyers and sellers based on their certain requirements. So, buyers can find quality credits that meet their regulatory obligations.
CIX exchange also gets rid of some restrictions to supplier financing. It will further help promote growth and development of the carbon markets.
The carbon credit spot exchange will also enable a resilient and scalable trading in Software-as-a-Service (SaaS) environment.
CIX CEO Mikkel Larsen remarked that:
“One of CIX’s goals is to create strong pricing signals for the liquid market… Enabling a trade matching process that is as seamless as possible will help to simplify the buyer’s journey and improve price transparency in the voluntary carbon market.”
Nasdaq’s Part in the Deal
Nasdaq’s SaaS technology powers over 2,300 companies in 50 countries. Its global network spans various industries including capital markets operators, regulators, banks, and other market players.
Nasdaq’s platform will allow CIX to bring trading functions to the VCM. In effect, this will help fix the growing complex needs of buyers and sellers of standardized contracts.
According to CIX, the partnership with Nasdaq will bring unparalleled expertise to the industry. Their joining forces is to build a global carbon exchange supported by quality and transparency.
As per Roland Chai from Nasdaq:
“As a technology partner to trusted market infrastructure operators and new markets around the world, Nasdaq is uniquely positioned to collaborate with a marketplace innovator like CIX… to bring their bold climate vision to life through our SaaS technology platform.”
He also added that Nasdaq’s partnership with CIX will help develop and evolve the carbon credit markets.
This agreement is the most recent move of Nasdaq to bridge technology and carbon market transformation.
Early this year, Nasdaq introduced the world’s first 3 carbon removal indexes. Also, CIX and Nasdaq partner Puro.earth had revealed their recent partnership. It intends to increase access to quality nature- and technology-based carbon removal credits.