The one of a kind blockchain platform for green investments moves from Proof of Concept (PoC) to a permanent technology and enhances user experience for best performance and functionality
A clean user-interface, enhanced performance, more convenience, and better functionalities such as aggregated green impact reporting and improved search functions are just some of the development milestones the Green Assets Wallet achieved over the last months.
GAW tech milestones – preparing for launch
It has been a busy year for the GAW team and partners. The platform has finally moved from a PoC to a permanent technology team under the lead of Stockholm Green Digital Finance (SGDF) and key partners CICERO (Center for International Climate Research and the leading global provider of Second Opinions on green bonds), and 4ire Labs, a blockchain consulting firm.
Having migrated to a Chromia production network it now provides the wallet with a hosting environment for transparent applications (TApps), making a diversity of providers available to the platform in an open market. One of the key points of Chromia (by ChromaWay, a blockchain pioneer and key partner of SGDF) is that it is like a conventional database. The blockchain sits over it and makes sure all nodes agree. During normal operation it works similar to an SQL server or Oracle, hence it is very easy to attach standard MS Office or Business Intelligence tools.
“Chromia is much more convenient for us as developers. It has made it easier for us to vastly improve user experience, the reporting system and search functionalities. In the future we will investigate how to add information to the GAW even more efficiently. This would be especially useful for issuers with many green projects,” said Kirill Kirikov, partner at 4ire Labs.
Technology driven platforms benefit from strong network effects which can drive attractive unit economics. As more people join the wallet, there will be a more robust track record. This will improve the overall model, as it allows for more accurate assessments for example of credit risk (through aggregated reporting and other data) and potentially increase returns for investors. Consequently, more investors and lenders will join the platform.
Innovative initiatives such as GAW could provide additional means to boost investor confidence in the underlying quality of green financial instruments (Asian Development Bank Institute 2018).
“The transparency and immutable history on the blockchain gives investors the confidence to trust issuers and allows for strong audit trails. Alongside this, code on the blockchain is also transparent, so green impact calculations are always performed using the same fair method. No surprises, and no arguments about rounding errors!” Thomas Barker, Senior Blockchain Expert and Advisor, SGDF
Fintech 2.0 is here to stay – GAW is the latest tech innovation in an underserved market
There is no doubt that Fintech has reached centre stage in the world of finance. This together with the fact that green investments are a market well underserved (green bonds are still less than 1% of total bonds issued), gives the Green Assets Wallet the competitive edge it needs, before launching end of the year.
Fintech is not new, but the technologies are advancing at an enormous pace. Their efficiency, speed and transparency are causing quite the disruptive impact across the board in the finance industry. Combining the openness of the internet and the safety of cryptography, it is a fast and safe way to exchange information and verify trust. Benefits of this technological shift are vast.
“A lot of people dismiss blockchain / DLT as just being slightly slower databases for people that are not allowed to trust each other. The GAW reminds us that is often exactly what these institutions actually need!” Thomas Barker, Senior Blockchain Expert and Advisor, SGDF
The Green Assets Wallet could not come at a better time, where the capital needs to implement the Paris Agreement and the SDGs are far from being satisfied. The climate finance gap alone is USD 2.5-4.8 trillion, equivalent to USD 166-322 billion per year in additional investments according to the Green Bank Network (2016). GAW applies the concept of sustainability attribution to green investments by effectively channelling private institutional capital to green projects globally, and specifically supporting green emerging market investments.
The next steps – spreading the benefits of technology
According to a fintech analysis by UNEP (2016), blockchain-use for core markets and exchanging value could still take a long time to reach industrial scale. Even though the technology would improve the cost and capital efficiency for financial institutions in the long run. This would come from removing intermediaries during trades and from faster settlement times.
The GAW is designed to do just that, i.e. the wallet empowers investors to make sound financial and sustainable choices using open and validated data. In addition, automation drives the ease of use and brings costs further down. At the same time, it equips green investors with the technology to better deliver on the Paris Climate Agreement and the SDGs. Harald Lund, CEO CICERO Shades of Green, summarised the key benefits of the Green Assets Wallet as, that it provides low cost transparency, quality assurance and direct access to issuer impact reports.
“We are on track for market launch and very excited to see all these beneficial changes happening on the platform. We have received much positive feedback from user demos on the wallet and cannot wait for market launch in a few months,” said Cecilia Repinski Executive Director at Stockholm Green Digital Finance.
Next steps for the Green Assets Wallet
Overall upscaling: adding more content (issuers, bonds, projects, reports)
Investigate how to automatize import of issuer and project data
Global roadshow and demonstrations in Africa, Latin America, North America and Asia
As blockchain technology continues to disrupt the finance sector through decentralization, immutability, and cost/capital efficiencies, we are delighted to be part of this revolution in helping build this trust, transparency and traceability in green investment transactions,” explained Cecilia. “We hope that the Green Assets Wallet will have an impact beyond in the sustainability transition of the real economy through green capital allocation, where it is mostly needed.”