The announcement was made during a summit on climate change in Madrid. The platform will be available in mid-2020.
It was reported that the Inter-American Development Bank (IDB) is working on the development of a platform for the issuance of green or ecological bonds, focused on the Latin American market. This project, known as the Green Bond Transparency Platform (PTBV), will be based on a blockchain, according to the IDB.
The multilateral institution announced the creation of the new tool last Wednesday, December 11th, during the United Nations Organization (UN) climate change summit (COP25), in Madrid, the Spanish capital.
The IDB explained that this tool will allow bond issuers and investors, among other instances involved to incorporate information or verify transactions. In addition, details on the performance of bonds and the use of proceeds will be available on the platform. The institution noted that the environmental impact of green bond issues on the region will also be recorded.
The Chief of the Connectivity Markets and Finance Division, Juan Antonio Ketterer, said that the PBTV seeks to solve one of the main challenges of the green bond market. He was referring to the ability for investors to access the additional information that they demand concerning the use of the proceeds of the bonds that they acquire.
Ketterer considers that the solution to that problem would also lead to a considerable increase in the growth of the green bond market. The IDB representative held that this product is vital for attracting private capital to Latin America.
It should be noted that that the development of the platform is still in beta phase and its official launch is scheduled for the middle of next year. However, the announcement did not make it clear whether the platform will be based on the permissioned blockchain LAC-Chain, launched in 2018 by the IDB, or another network.
The project is said to have the support of more than 30 organizations, among which the most prominent is the German Ministry of Economic Cooperation and Development (BMZ).
The IDB and Blockchains
It is worth mentioning that it is not the first time that the international organization has joined the blockchain industry. In late November, the IDB’s innovation arm approved a contribution of USD 600,000 for the project of a blockchain conducted by the company EthicHub, willing to finance small farmers in Mexico.
An entity under the Ministry of Economy and Finance of Peru announced last April that it would use the LAC-Chain test network in order to verify the purchases of different entities of the Peruvian State. In this case, LAC-Chain would work to intermediate between these agencies and electronic purchasing services.
Previously, the institution had invited to a contest focused on companies specialized in the blockchain. The competition, called “Idear Soluciones,” included a USD 25,000 prize for the most successful creative solution for development challenges in Latin America and the Caribbean.
It can be observed that the use of blockchains for environmental initiatives has been growing in popularity. During the aforementioned event alone, there were several announcements involving these technologies that seek to promote large-scale ecological practices.
By Willmen Blanco
