European banks launch greener blockchain platform “Proof of Climate”
Two banks from Sweden and France have announced the launch of a new digital lending platform based on blockchain technology, according to Cointelegraph. The platform aims to enable institutional clients to issue, trade, and settle bonds digitally. The special thing about it: The platform is intended to put sustainability in the foreground by using a “Proof of Climate awaReness” validation protocol. This procedure is intended to ensure that blockchain technology is as climate-friendly and energy-efficient as possible.
“Proof of Climate” aims to improve the climate balance
The platform is a joint project of Skandinaviska Enskilda Banken (SEB) and Credit Agricole Bank called “so|bond”. The Proof of Climate protocol aims to enable energy consumption comparable to that of non-blockchain systems. The participating nodes should thus have the incentive to improve the ecological footprint of their infrastructures.
Each node is rewarded according to a formula based on its climate impact. The lower the ecological footprint, the greater the reward. so|bond would be the first use case for the Proof of Climate protocol developed by French IT provider Finaxys. Blockchain technology is often criticized because it often consumes a lot of energy and thus quickly becomes a heavy burden on the climate. This is especially the case when electricity does not come from renewable sources. The new platform, on the other hand, aims to promote sustainability.
“Commitment to Green Finance”
“The platform’s innovative approach, both in terms of blockchain infrastructure and the securities market, goes hand in hand with the strong commitment to green and sustainable finance that is at the heart of our Societal Project,” says Romaric Rolleti, Head of Innovation and digital transformation at Crédit Agricole CIB. According to Rolleti, the blockchain platform is part of a larger plan for the bank’s digital transformation.
The project also joins numerous other efforts exploring the use of blockchain, smart contracts, and the Internet of Things (IoT) for global environmental thinking. For example, in October 2022, the Bank for International Settlements (BIS), the Hong Kong Monetary Authority and the United Nations Global Innovation Hub on climate change unveiled the results of their Genesis 2.0 initiative – two prototype tokenized green bonds. It remains to be seen whether the platform really has a positive effect on the climate footprint of blockchain systems, or whether it is just greenwashing.
