Swiss-South African start-up Toco has launched a digital currency backed by carbon credits, which can be used to offset carbon emissions while making everyday purchases. The currency is already accepted at 50 shops and cafes in Switzerland and Denmark. Toco’s founders believe that linking money to carbon removal can help combat climate change without sacrificing economic growth. The system works by using traditional currency to purchase Tocos, which are then used to buy carbon removal certificates from projects like renewable energy or forests. These certificates back the currency’s value and are held by a non-profit foundation. Although some experts are skeptical about using financial markets to address environmental issues, Toco ensures transparency through a permissioned blockchain and regulation by the Swiss Financial Market Supervisory Authority. However, concerns remain about the underlying value of the carbon credits and potential market volatility. Despite challenges, Toco has garnered 1,000 users and plans to expand in Europe to make a significant impact on climate change. The novel monetary system aims to incentivize carbon removal efforts and create demand for decarbonization in the market. It remains to be seen if Toco’s approach will be successful in merging environmental goals with financial transactions.
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