Financial services company Northern Trust has launched an institutional carbon credit ecosystem on its Northern Trust Matrix Zenith digital asset platform, Cointelegraph reported. Northern Trust will act as a custodian to record, transfer and settle digital carbon credit transactions on the voluntary carbon market.

Legal agreements are generated by smart contracts on a permissioned blockchain, and these agreements are the basis for trading digital carbon credits for fiat currency and “decommissioning” them.

The ecosystem reached the minimum viable product stage in September 2023 with two project developers and three purchasers. The full version also had a similar number of participants.

Justin Chapman, global head of digital assets and financial markets at Northern Trust, said the system supports the digital asset lifecycle from asset creation, pricing, trading, custody to reporting.

UK-based Water Recovery Systems IP and Lichtenstein-based CUT Carbon Distributed Technologies are the first carbon credit sellers on the system. CUT launched its Carbon Utility Token (CUT) on Arbitrum in June 2023.

Northern Trust also worked with PwC to put private equity data management on the blockchain and began offering digital asset custody services in 2018. It is also one of the co-founders of Zodia Custody and has participated in blockchain-related projects with SWIFT, EY, and others.