The most awaited & ambitious project of Abu Dhabi Air Carbon Exchange is finally going live. The cleaning house in the Abu Dhabi Global Market (ADGM) is fully operational. Essential elements are placed and settled on the platform.
The first indication of establishing the regional ADGM was announced in 2021. In the report, the team concluded the support of Hub71 in Abu Dhabi’s global tech ecosystem.
State news agencies have clarified the project of ADGM, which says that it is the first jurisdiction in the world to regulate voluntary carbon credits as financial instruments. The regulatory framework to license exchanges and clearing houses will spot a derivatives market for various products.
ACX Abu Dhabi is the first entity offering licenses under this framework. It is going to be the first regulated, recognized investment exchange that will conduct the monitoring of the clearing houses offering environmental instruments that will be directly linked to the carbon credits.
ACX will have strict guidelines to assess the client asset segregation, capital, and Audit. As the investment to run the project is already secure, and all the necessary regulatory licenses have been approved, the ACX will be free to perform in the voluntary carbon market participants, allowing the trade of carbon credits and other environmental instruments under the capital markets regulatory framework.
The first inaugural carbon credits trade was successfully executed between the Abu Dhabi Bank (FAB) and carbon trading company Helix Climate.
The head of the Global Markets at First Abu Dhabi Bank was happy to see the first trade. It is UAE’s largest bank that supports the project for expansion and offers carbon market price signals in the precision data so the companies can work on reducing emissions. Or find alternatives to control the greenhouse gas efficiently.
On the news release, Simon Harman, a founding partner of the Helix Cliemte, said, It is a proud moment seeing the first trade executed on ACX Abu Dhabi, a fully regulated carbon exchange.
The company has a long-term vision to grow liquidity with complete transparency. The team is confident about voluntary carbon markets while looking forward to transacting volume on the exchange.
Arvind Ramamurthy, chief of market development at ADGM, said, We are thrilled to witness a historical move seeing the project getting a life. It is a critical time to focus on the global carbon markets.
The step has marked the milestone towards growing carbon markets. ACX will play a pivotal role in developing environmental instruments for the other markets and financial instruments with the support of the virtual asset markets.
Development towards monitoring the carbon market will take us one step closer to regulating commodities, “Said ACX co-founder, and co-CEO William Pazos. The organization is honored to be recognized for the development and innovation of new technology to have a positive change in society. It is critically crucial for the sector and cannot be ignored.
Electronic trading facilities allow participants to execute and settle over-the-counter transactions immediately. The trade concluded with the South Pole, the world’s leading climate project developer and solutions provider.
ACX is working on building higher-integrity carbon markets for a sustainable environment. Both buyers and sellers will have complete control over the trade thanks to the close regulatory wrapper. Every trade is monitored with the base value and demand in the market. Trade information is scrutinized by a separate financial service authority that ensures clarity and complete transparency.
It was a new moves that everyone was happy to see and be part of the trading. It will change how we monitor the carbon markets and take advantage of trading. Both buyers and sellers will have backup security on the trade that enables trust and confidence.
Being the first in the world gives the ACX needed benefits and encourages participants to join hands to build a sustainable model for the carbon market.
New developments will take place as more trading happens over time. Electronic transaction facilities are already enabled on the trade. Thus, there will be no hassle for the participants involved.
We will see more announcements from the ACX on the changes and developments in the operation that will take the project to new heights. So, stay tuned.
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