How Digital Financial Assets Are Changing the Carbon Market Forever
And Why Go Balance’s Natural Capital Credits Are Leading the Way
Insight by Go Balance
Voluntary carbon credits (VCCs) are entering a new era—one defined not by the registry model of the past, but by the secure, digitised, and legally robust frameworks of tomorrow.
For too long, the voluntary carbon market (VCM) has lacked the financial infrastructure required to scale. Buyers have faced fragmented systems, manual processes, limited legal protections, and opaque market practices. What the VCM needs is greater transparency, clearer asset definitions and ownership, and—importantly—a more robust global infrastructure.
Distributed ledger technologies (DLT) can bring greater integrity to carbon credit transactions, supporting the scale and credibility needed for meaningful climate impact. In the context of carbon credits, tokenization provides a transparent, verifiable, and easily transferable digital representation of carbon offsets.
Our Natural Capital Credits (NCCs) now combine high-integrity project outcomes with next-generation financial infrastructure. Go Balance utilises the Northern Trust Carbon Ecosystem™ (NTCE) to provide institutional buyers a transparent, efficient, and secure settlement experience for purchasing our credits.
Go Balance Credits now available as Digital Financial Assets on the Northern Trust Carbon Ecosystem – Read More…
A Stronger Financial Framework for the Voluntary Carbon Market
Tokenization refers to the process of converting assets into digital tokens that represent ownership rights on distributed ledger technologies (DLT). In so doing, all transactions recorded on a DLT can be traced, audited, and verified in real time, reducing the risk of fraud and increasing market efficiency.
The Northern Trust Carbon Ecosystem supports the growing interest in the VCM by providing an end-to end digital lifecycle management capability for digital voluntary carbon credits.
Digital VCCs are classified as digital financial assets under Section 8 of the U.S. Uniform Commercial Code (UCC). Under U.S. law and regulated by the Commodity Futures Trading Commission (CFTC), digital VCCs are defined as intangible commodities, and therefore qualify as financial assets.
Under these regulations VCCs are custodied under U.S. commercial law with the same rigour and safeguards applied to equities, bonds, and cash. This represents the kind of transformation required to meaningfully improve how the voluntary carbon market functions.
When a credit is recorded as a digital VCC, the claims and rights of the credit become embedded with the digital VCC. This means that the credit has no legal existence or value independent of the digital VCC. This is an important legal status and brings both unprecedented credibility and usability to the voluntary carbon market.
A New Class of Asset: Digital Voluntary Carbon Credits
The Northern Trust Carbon Ecosystem™ is a fully digital platform for the end-to-end lifecycle management of digital voluntary carbon credits. It is supported by institutional-grade digital assets infrastructure. Powered by Northern Trust Matrix Zenith, Northern Trust’s digital assets platform utilizing private ledger digital blockchain technology to support digital asset lifecycle events. This infrastructure provides a digital platform for project developers and buyers to connect, explore, transact and retire voluntary carbon credits.
Northern Trust is a leading provider of wealth management, asset servicing, asset management, and banking, with assets under custody/administration of US$16.8 trillion, and assets under management of US$1.6 trillion, as of December 31, 2024.
The NTCE provides institutional buyers with the opportunity to directly connect with project developers, removing intermediaries and therefore reducing friction. Northern Trust acts as designated custodian to the owner of the credit, providing recordation, storage, safekeeping, recordkeeping and reporting.
Go Balance is the first REDD+ project developer to be included in the Northern Trust Carbon Ecosystem project developer directory. The NTCE enables project developers and buyers to interact directly, with transparent and efficient seamless digitization of transactions. It enables seamless transactions and reduced risk through a Delivery versus Payment (DvP) settlement process. This is triggered by a purchase and sale agreement, managed through a digital document platform.
The Role of Tokenisation in Scaling Trust and Transparency
Tokenisation in this context refers to the conversion of assets into a digital token that represents ownership on distributed ledger technology (DLT). When applied to carbon credits, this process ensures that each credit carries a unique digital identity, which is auditable, verifiable, and traceable in real time.
This is essential in a market that demands greater integrity. By enabling full lifecycle tracking—from issuance to sale, resale, and retirement—tokenisation reduces fraud risk, improves data accuracy, and supports compliance with both buyer expectations and regulatory standards.
Advantages of Voluntary Carbon Credits as Digital Financial Assets
The benefits of voluntary carbon credits as digital financial assets are substantial. For both Go Balance as a project developer and for buyers or investors, this unlocks a range of powerful financial and operational advantages for our Natural Capital Credits:
- Digital VCCs can be pledged as collateral. This enables flexible financing structures such as project-level debt or capital raising.
- They can be embedded in fund structures. Opens access to capital pools that cannot directly hold underlying credits.
- Every credit is recorded on a private distributed ledger. Ensures full traceability and immutable auditability from issuance to retirement.
For buyers and investors, this means:
- Fiduciary security – Under Section 8 of the UCC, digital voluntary carbon credits held in custody benefit from legal protections, including the obligation for custodians to comply with instructions from the owner and the requirement to prevent unauthorised use.
- Custody parity – Our NCCs benefit from the same infrastructure used by institutional investors for traditional securities, eliminating the risks associated with undercapitalised registries.
- Smart settlement – Automated delivery-versus-payment (DvP) enables seamless transactions without third-party brokers or escrow accounts.
A Paradigm Shift in Climate Finance through Institutional-Grade VCCs
Beyond individual transaction benefits, this approach represents a larger structural shift. In a recent report, analysts estimate that tokenisation of illiquid assets could represent a $16 trillion opportunity by 2030. Until now, carbon credits have been largely excluded from serious financial treatment. That’s now changing.
This is not an incremental improvement—it’s a paradigm shift. While registry-based credits function like static certificates, digital voluntary carbon credits operate as trusted, traceable, and institutional-grade instruments.
As such, voluntary carbon credits are being redefined—not only as a tool for offsetting—but as fully-fledged digital financial assets.
Go Balance: Integrity at Every Stage of the Credit Lifecycle
At Go Balance, we have always prioritised the integrity of our REDD+ outcomes through the Natural Forest Standard (NFS). The NFS demands a combination of verifiable climate, social, and biodiversity results. The Trocano Araretama Project exemplifies that commitment through its jurisdictional-scale impact and verified, community-driven delivery.
Now, by availing of cutting-edge infrastructure and commitment to driving efficiency and transparency in the voluntary carbon market, we’re bringing that same integrity to the buyers of our Natural Capital Credits.
This is the future of carbon finance. For asset managers, institutional investors, insurers, and climate-aligned corporates, Go Balance Natural Capital Credits offer not only real climate impact—but a secure, scalable, and transparent investment as digital voluntary carbon credits.
That’s transformative.
Resources
GDF Report Tokenization For Net Zero
DTCC Digital Assets White Paper – Building the Digital Asset Securities Ecosystem