BSV Blockchain-based smart legal contract allows for successful trading and settlement

Tokenovate and GMEX ZERO13 Enable Execution of World’s First Smart Legal Contract for Voluntary Trading of Carbon Credit Derivatives Using ISDA Definitions

LONDON, May 31, 2023 – (ACN Newswire) – Tokenovate, a financial services company providing distributed financial markets infrastructure (dFMI) enabling programmatic lifecycle event management of the pre-trade to post-trade workflow for OTC and exchange-traded derivatives, and ZERO13, a GMEX Group initiative , which provides a digital climate fintech aggregation ecosystem announces the successful implementation of the world’s first smart legal contract for voluntary carbon credit (VCC) derivatives trades that refer to the 2022 ISDA (The International Swaps and Derivatives Association) Verified Carbon Credit Transactions Definitions.

The unique partnership approach enabled Tokenovate and ZERO13 to demonstrate the creation of a BSV Blockchain-based, high-quality, smart legal contract for waste-to-energy VCC trading originating from ‘Bio-CNG Project AJS Fuels’ in Savli, Gujarat, which uses biogas technology to capture methane from animal waste for bio-CNG bottling purposes for use in the transport sector. This was achieved by integrating Tokenovate dFMI into the ZERO13 Hub, a distributed orchestration layer that digitally connects carbon participants, registries and exchanges across jurisdictions to trade, clear and settle VCC spot and derivatives contracts.

The VCC trades were executed on the Securities, Commodities and Derivatives Exchange (SECDEX), a regulated financial market infrastructure (FMI) firm authorized and licensed by the Seychelles FSA, between Maverik Inc., a waste solutions advisory firm representing the project developer as the seller and Tempus USA Inc. (Tempus Network), as the buyer. SECDEX was connected to the Universal Carbon Registry (UCR), where the VCCs are registered via the ZERO13 Hub.

VCCs are a critical element in achieving global net zero and energy transition targets by 2030, with distributed ledger technology (DLT) playing an important role in facilitating this outcome, as evidenced by research reports:

– January 2023: Bloomberg NEF believes the market for voluntary carbon credits could reach $1 trillion by 2037.

– March 2023: Citi GPS “forecasted $4 trillion to $5 trillion of tokenized digital securities and $1 trillion of distributed ledger technology (DLT)-based trade finance volumes by 2030”.

Richard Baker, founder and CEO of Tokenovate commented: “The adoption of smart legal contracts will improve lifecycle event management and increase the credibility of derivatives trading tremendously. DLT will facilitate speed at scale, while improving security and transparency. We believe the digitization of the financial market infrastructure will now accelerate , and it is Tokenovate’s ambition to operate at the heart of this transformation. Today’s announcement and collaboration with ZERO13 is an important first step and a significant milestone in bringing VCCs to market using BSV Blockchain-based smart legal contracts.”

Hirander Misra, CEO of GMEX Group and ZERO13 commented: “We are delighted to partner with Tokenovate to execute and settle the first ever trades using the ISDA VCC definitions on SECDEX, underpinned by BSV Blockchain smart contract capabilities.” He added, “Our unique approach uses a globally recognized standard, trusted by institutions and businesses worldwide, to help enable liquidity growth in VCC markets digitally and flexibly map it to meet buyer criteria.”

Scott O’Malia, CEO of ISDA commented: “The voluntary carbon market can play an important role in channeling funding to green projects, technology and infrastructure that need investment. We are very pleased that Tokenovate and its partner ZERO13 have used the 2022 ISDA Verified Carbon Credit Transactions Definitions and Common Domain Model to Create a Smart Legal Contract for VCC Trading Digitization of derivatives markets will significantly improve efficiency and lay the foundation for growth at scale.

Tokenovate and ZERO13 will continue to work together to facilitate VCC trading using DLT-based smart legal contracts, with the 2022 ISDA Verified Carbon Credit Transactions Definitions along with its globally agreed standards and digital tools.

Sources:

Bloomberg NEF report is available here.

Citi GPS report is available here.

The Law Commission’s advice on smart contracts is available here.

About Tokenovate

Tokenovate is a UK-based fintech company that provides distributed financial market infrastructure, enabling programmatic lifecycle event management of the pre-trade to post-trade workflow for OTC traded derivatives. Our vision is to reduce the risk of trading and set a new standard for frictionless and efficient execution through the adoption of smart legal contracts. Read more about Tokenovate at www.tokenovate.com.

About GMEX Group Limited

GMEX Group (GMEX) offers sustainable digital solutions for the new era of global markets. The firm is a leading global provider of multi-asset exchange trading and post-trade software/software as-a-Service (SaaS) market infrastructure solutions and “network of networks” digital platform services. GMEX addresses end-to-end regulatory and contractual environment needs for issuance, trading, clearing and settlement across exchanges and across multiple asset classes, including traditional, digital and hybrid assets, including carbon credits and real-world ESG values. It is the winner of:

– Best development in Fintech of the Year’ – 2022

– Best Global Hybrid Finance Fintech Company’ – 2022

– Best Solution for Trading Digital Assets – 2023

– Most Influential Financial Technology Companies in 2023-2023

For more information about GMEX, please visit https://www.gmex-group.com/

About ZERO13

ZERO13, a venture of GMEX, is an automated AI and blockchain powered international carbon exchange, registry and aggregation hub ecosystem. ZERO13 Hub provides a platform-as-a-service, which provides a distributed entry point for the digital issuance, trading and settlement of carbon credits and real-world assets such as ESG securities. The ZERO13 Hub connects multiple international carbon exchanges, registries, managers and ESG project owners globally for supply verification, transparent pricing and real-time settlement using APIs and across blockchains enabled by the ZERO13 Chain (‘Pyctor’).

For more information about ZERO13, please visit https://www.zero13.net/

About SECDEX

The Seychelles-based Securities, Commodities and Derivatives Exchange (“SECDEX”) is a market infrastructure ecosystem located in the Seychelles. It is a hybrid multi-asset exchange that combines the benefits of a digital exchange with the benefits of a traditional exchange. It focuses on securities, debt, spot commodities and derivative contracts in traditional and digital tokenized form.

The group consists of:

– SECDEX Exchange Limited (“SECDEX Exchange”), which is authorized and licensed by the Seychelles FSA to operate a regulated securities exchange with multi-asset options, which includes derivatives and digital assets.

– SECDEX Clearing Limited (“SECDEX Clearing”), which is authorized and licensed by the Seychelles FSA to operate a regulated central counterparty (CCP) clearing house to clear trades executed on the SECDEX Exchange.

– SECDEX Depository Limited (“SECDEX Depository”), which is authorized and licensed by the Seychelles FSA to operate as a regulated securities depository and registry for securities listed on the SECDEX Exchange.

– SECDEX Digital Custodian Limited (“SECDEX Digital Custodian” or “SDC”), which is authorized and regulated under the regulatory Sandbox of Seychelles FSA to operate digital custody services for a wide range of digital assets.

– SECDEX Digital Marketplace (“SDC Digital Marketplace” or “SDM” or “SECDEX Marketplace”), which operates as part of SECDEX Digital Custodian Limited as a trading venue to offer a wide range of cryptocurrencies. These, by being in custody, can be traded.

For more information, visit www.secdex.net.

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