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Revolutionary technology platform First Carbon looks like it will be going public soon on Canada’s TSX.V following a letter of intent from DeepMarkit. This could see investors getting a chance to buy shares in First Carbon’s blockchain-based SaaS (software-as-a-Service) business, which facilitates the minting of carbon credits into saleable tokens.

A non-binding letter of intent will see First Carbon Corp shareholders receiving approximately 15m shares in already listed DeepMarkit for a deemed consideration of approximately C$7.5m.

First Carbon is coming to the market at the right time

First Carbon Corp seems to be coming to the market with this technology at just the right time: it combines NFT technology with the growing demand and value of carbon credits in the post-COP 26 world. We anticipate that carbon credits are about to mature as a tradable asset class. First Carbon provides for the minting of those credits into NFTs which can then be traded on token exchanges or indeed exchanged electronically.

According to Trove Research, the cost of offsetting carbon emissions is expected to surge tenfold over the next decade as growing numbers of businesses adopt net zero targets, with carbon credit prices tipped to reach between $20 and $50 a metric ton of CO2 by 2030. Some recent estimates have put the value of the carbon credit market at more than a trillion dollars, with strong support from institutional funds. Yet the market remains hampered by antiquated trading systems and is in dire need of an update.

Increased pressure to implement ESG policies has resulted in growing demand for carbon offset markets – the total value of global carbon markets has grown five times since 2017, hitting a record $260bn in 2020, according to Refinitiv data.

While carbon credits are broadly available, trading is highly inaccessible, fragmented, opaque and inefficient. These issues hamper both the supply and demand in the markets. Leveraging blockchain, First Carbon could bring liquidity to the carbon markets through its decentralised platform, formalising offset trading on tokenised exchanges.

First Carbon is beta testing the MintCarbon.io platform

FCC is using its MintCarbon.io platform to achieve this. The platform is already live, is able to mint carbon NFTs now, and The Armchair Trader has been witness to a demo of the technology. MintCarbon.io is still in the beta testing phase and its management team say they are anticipating an official launch at some stage in Q1 of next year.

DeepMarkit also announced a non-brokered private placement under which it intends to issue, pursuant to applicable exemptions from prospectus requirements of Canadian securities laws, up to 4,000,000 units at a price of C$0.50 per Unit, for gross proceeds of up to C$2m.

Trading in the common shares of DeepMarkit is currently halted. While there is no certainty that the common shares of the company will resume trading until the acquisition is completed and approved by the TSX, the exchange may allow trading to resume after it has reviewed initial filings by DeepMarkit with respect to the acquisition.

This looks to be a very exciting piece of technology, as it is positioned at the sweet spot between the evolution of the carbon credits market and the ongoing development of NFTs as a means to underscore secure transactions, either on exchange or off exchange.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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