Asset Tokenization in Financial Markets 2025

Contents32 A leading example is AirCarbon Exchange (ACX), a global platform changing the VCM by providing a transparent, efficient trading system for environmental assets.67 Another example is the recently successful proof-of-concept pilot of using tokenized deposits to settle carbon credits, led by Standard Chartered, Mox Bank, Mastercard and Libeara.68 The CC market could benefit from tokenization for the following reasons: 1. Enhances information symmetry Tokenizing CCs can enhance transparency, traceability and liquidity in carbon markets. This process streamlines issuance, trading and retirement, reducing administrative costs and minimizing risks such as double- counting and greenwashing. 2. Facilitates operational efficiency Smart contracts automate transactions, ensuring compliance with regulatory standards and boosting market efficiency. 3. Expands accessibility Tokenization democratizes access, allowing individuals and smaller organizations to participate in carbon offset initiatives, broadening market reach and impact. CCs have faced scrutiny due to concerns about overstated emission reductions and the actual impact of offset projects. To address this, the Integrity Council for the VCM (ICVCM) introduced the Core Carbon Principles to enhance buyer confidence by ensuring rigorous baseline fuel determination and usage monitoring. To advance the development of carbon credits using DLT, the InterWork Alliance’s Voluntary Ecological Markets set forth principles for further collaboration.69 CCs can vary in quality, prompting standards bodies to implement stringent issuance and trading standards to prevent low-quality CCs from entering markets. While tokenization alone cannot fully address these challenges due to operational and human factors, integrating smart contracts with robust governance can standardize and enhance the quality of tokenized CCs. Tokenized assets