This Week: Nasdaq; Symphony/Google; Interop.io and more

Nasdaq brings exchange technology to voluntary carbon markets

Nasdaq has released an exchange technology for carbon markets using smart contracts to digitize carbon credits issuance, settlement, and custody. The exchange operator has partnered with Puro.earth, a standards and registry platform for engineered carbon removal, to register CO2 removal certificates (Corcs).

Carbon credits trade like a typical financial asset. Sometimes called carbon offsets, they allow companies unable to limit their carbon emissions to continue emitting carbon. By purchasing a stake in a project that is limiting, sequestering, or avoiding carbon emissions, a credit, equal to one metric ton of CO2, can be used by the company to offset or cancel out its emissions.

The value of a credit is decided by market demand. CEO or Puro.earth, Antti Vihavainen, which was acquired by Nasdaq in 2021, said that today, “we are in a market where buyers have preferences. Some of them prefer European projects, some of them prefer APAC. They may have some preferences to the permanence of the sequestration, or they may have some preferences to certain Sustainable Development Goals … All of these affect the price.”

Proponents say carbon markets are an important step for companies opting to reach net-zero emissions and can drive investment toward green projects. However, the voluntary carbon market is also being realized as lucrative. Morgan Stanley published a report in October that estimated that the voluntary carbon credit market could grow to $250 billion by 2050, up from $2 billion in 2020.

“Companies are increasingly making commitments to net zero,” Roland Chai, executive vice president of market platforms at Nasdaq, tells WatersTechnology. He notes that developments in regulation, taxation, and disclosure obligations are pushing the market forward. “Companies need to plot a path to get there, either by operating on a completely carbon neutral basis or purchasing carbon credits, which drives the demand for the asset class.”

The technology from Nasdaq aims to promote the growth of this market. The smart contracts can be used to create standardized digital carbon credits and then deployed via private centralized databases or private blockchain technology.

Chai says that using DLT made sense for such a new asset class, adding that many of Nasdaq’s clients increasingly “want to be able to start issuing assets on a digital layer. … We look for practical uses of DLT technology, not just DLT for DLT’s sake,” Chai says.

Nasdaq will license the technology to other exchanges, central counterparties, central securities depositories, and firms at large. According to Chai, the goal is to create a platform that could operate either as a standalone platform or be integrated into existing architectures. Importantly, Nasdaq wanted firms to be able to use the same settlement and payment infrastructure for carbon markets as they would for traditional markets.

The hope is that by using the registry from Puro.earth, the market will benefit from standardization and attract greater liquidity. The Corcs are registered and verified by Puro.earth, now using Nasdaq’s technology. The system will be available for carbon marketplaces and exchanges via API.

As COP28 carries on in Dubai, the partnership between Puro.earth and Nasdaq will see the private sector electronify what has been a largely manual and paper-based market.

Symphony taps Google Cloud for Cloud9 voice product

Symphony’s Cloud9 voice product for trading collaboration will use Google Cloud’s speech-to-text generative AI capabilities to offer financial markets voice analytics. Symphony, a markets infrastructure and technology platform, will build on its existing partnership with Google Cloud, which serves as its primary cloud provider.

Using Google Cloud’s Vertex AI platform, Cloud9’s voice product will gain speech-to-text fine-tuning and natural language processing (NLP) capabilities. Cloud9 gives finance and trading teams live voice analytics that can be used to improve customer service, trade reconstruction, and post-trade processing. The compliance functionality can be used for risk management by flagging calls for compliance review when certain words in discussions are detected.

EquiLend makes Orbisa data available on the Snowflake marketplace

EquiLend added its Orbisa securities lending data to Snowflake Marketplace.

Orbisa, which EquiLend operates, has a dataset of $24 trillion of lendable equity and fixed-income securities. Orbisa data helps buy-side firms view securities lending markets internationally and analyze securities lending metrics for individual securities.

Snowflake’s cross-cloud technology, Snowgrid, powers Snowflake Marketplace. It helps companies get direct access to raw data products and aims to simplify the commercialization of data products.

Interop.io releases desktop interoperability maturity model

Interop.io released its desktop interoperability maturity model. The framework helps capital markets participants assess and improve desktop interoperability through workflow and user interface integration.

The model allows firms to assess where they are in the interop process and anticipate common setbacks to interoperability projects. Using the model, firms can also select application providers based on their interop maturity level. On the other hand, software vendors can better understand their customers’ interop goals, and systems integrators can use the model to chart a path for their clients’ digital transformation projects.

Clarity AI taps AWS for sustainable investing

Clarity AI, which offers clients environmental and social insights, uses AWS’s generative AI, machine learning, and analytics tools to measure companies’ and funds’ sustainability and social impact. AWS announced this at AWS re:Invent conference in Las Vegas.

Clarity AI’s platform analyzes data to help investors measure and improve their portfolios’ social and sustainability impact and comply with regulatory reporting requirements. Clarity AI is also developing generative AI models using Amazon SageMaker to uncover environmental impact data on companies.

Tokenbridge releases tokenization platform for wealth and fund management

Tokenbridge released a platform for investment management using distributed ledger technology to provide access to digital investments.

The Tokenbridge platform is an open-architecture and blockchain-agnostic solution that offers white-label B2B token distribution solutions. The platform is compatible with any asset or network token and has integrated automated business rules. It also has a Central Bank Digital Currency (CBDC) or Stablecoin cash management solution.