Reported by: Gillian Tett

This month might not seem the perfect moment for an institution such as Goldman Sachs to be championing the benefits of “blockchain” or “tokenisation”. After all, these buzz words first shot to fame in the cryptocurrency sector, which has lost two-thirds of its value during the past year. And the recent implosion of Sam Bankman-Fried’s FTX empire is likely to leave many traditional financiers shying away from digital assets — if not deriding them as a fraud.

Yet when green activists, politicians and scientists assembled at COP27 this month, Rosie Hampson, an executive director at Goldman Sachs, was happily talking of both. In recent months the Wall Street bank has joined forces with the Hong Kong Monetary Authority, Bank for International Settlements and other financial institutions, to launch a capital markets initiative known as “Genesis” (a name it unfortunately shares with the struggling crypto broker). This Genesis aims to use blockchain and digital tokenisation to help investors who purchase climate-related bonds track the associated carbon credits in real time. 

“[With] Genesis we are thinking about how you can use blockchain, smart contract technology and IoT devices to support green bond contracts,” Hampson told a COP side event. She noted that this could change the process from “book building all the way through to primary issuance, asset servicing and . . . the secondary market component.” 

Or as Bénédicte Nolens, of the BIS, echoed in a recent podcast: “It is actually hard to sell a green bond [today]. But if you can attach the future carbon offset [with tokenisation] then it becomes a lot more attractive to the end investor.”

Read full report: https://www.ft.com/content/6d049669-1fac-40d8-bd24-955de5d29730