The Tokyo Stock Exchange is opening up trading for a new type of asset: carbon credits.
What’s happening:
- The Tokyo Stock Exchange is set to launch its new carbon credits market next week
- The concept is to enable transparency in carbon credit pricing and provide a purpose built platform for trading carbon credits within Japan
Why it matters:
- The Tokyo Stock Exchange is the third largest stock exchange in the world
- Carbon credits are gaining enormous momentum as more and more large companies seek to reduce their environmental impact
- Merging carbon credits and traditional public markets together is a major sign of adoption for emission reductions globally
How it works:
- The new carbon credit market will allow for trading of ‘J-Credits’ which are carbon credits already certified by the Japanese government
- Due to relatively low liquidity the new market will trade by auction to begin, with one session in the morning and one session in the afternoon
By the numbers:
- The Tokyo Stock Exchange has over 3500 publicly listed companies with a combined value of more than $6T
- There will be 188 registered entities in the new carbon credit market upon launch
