Climate Impact X (CIX), a global marketplace and exchange for quality environmental credits, will leverage Nasdaq’s cloud-based trading technology to power its new spot exchange platform. Established in Singapore as a joint venture between DBS Bank, Singapore Exchange, Standard Chartered and Temasek, CIX aims to help innovate the carbon markets and drive environmental impact at scale through a suite of trading venues.
CIX CEO Mikkel Larsen points out that, like in other commodities, a tradeable market for carbon credits will help to unlock price transparency, value discovery and liquidity—all of which are crucial to scale the carbon markets. It also lends itself to a certain degree of standardization, which is critical to building trust and credibility in the market.
Looking forward, McKinsey estimates that demand for carbon credits could grow to 15 times its current size by 2030 and 100 times by 2050. Larsen expects the two segments of the carbon credits market – the compliance market and voluntary market – to converge over time, and that will produce stronger price signals for market participants.
Larsen stresses that top-notch technology is critical to ensuring the integrity, durability, and scalability of the market. By utilizing Nasdaq’s cloud-based trading technology, buyers and sellers on CIX’s exchange can be matched based on unique parameters, ensuring that buyers are acquiring credits that meet their regulatory needs and requirements. Counterparty risk is also reduced by permitting buyers to select the seller of their choice. And finally, the technology can accommodate both standardized and customized products, which is significant given the fact that the market is in its nascency.
Watch the video interview and learn more about how CIX is innovating the carbon markets.