ESG

Societe Generale issues its first green bond on Ethereum

The unsecured bond has a value of 10 million euros and a maturity of three years, with all the proceeds going for eligible green activities investments.

The third-largest bank in France, Societe Generale, reported issuing its first digital green bond as a security token on the Ethereum public blockchain. The bond, registered by Forge, a subsidiary of Societe Generale, went public on Nov.

The bond has a value of 10 million euros (around $11 million) and a maturity of three years.

Related: Tether’s ‘new era for capital raises’ Bitfinex bond stutters

The digital infrastructure of the bond grants 24/7 open access to the data on its carbon footprint through the bond’s smart contract.

“This enables issuers and investors to measure the carbon emissions of their securities on the financial infrastructure.” 

Another innovation of the bond is a technical option for investors to settle securities on-chain through the EUR CoinVertible, a euro-pegged stablecoin issued by Forge in April 2023.

“While Central Bank Digital Currencies (CBDC) solutions are being experimented, this panel of settlement methods demonstrates the large capabilities of SG-FORGE in providing full spectrum of on-chain services.”

Societe Generale has been active in the crypto sector, issuing euro bonds on the Ethereum blockchain and security tokens on the Tezos blockchain, as well as proposing Dai (DAI) stablecoin loans in exchange for bond tokens. In July 2023, Forge became the first company to obtain the highest access license for crypto services in France. 

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Recycle-to-earn, a new frontier for blockchain technology toward ESG goals

Circularr won the European Blockchain Convention’s award for blockchain startup of the year for its pitch focused on recycling with blockchain.

“Recycle-to-earn”: This was the motto presented by Eric Vogel earlier this month while pitching his startup at the European Blockchain Convention, decades after he started recycling plastics and cans from his grandmother’s house to earn extra money for a Game Boy. 

Vogel’s love for video games and increasing interest in the impact of recycling were his inspirations for Circularr, a London-based company seeking to connect recyclers, manufacturers and brands throughout a decentralized recycling ecosystem.

Proper recycling is a growing challenge. According to the Plastic Waste Makers Index, recycling across the world is not expanding fast enough to keep up with plastic waste, resulting in greater chances of it being disposed of in oceans and rivers or on beaches rather than going to recycling plants. In 2021, over 139 million metric tons of single-use plastic waste were generated worldwide.

The nearly three-year-old startup is allowing consumers to deposit plastic waste at collection points, such as reverse vending machine manufacturers, recycling points and smart bins through partnerships. The containers are collected and sent to a recycling plant. This widely used process, however, is now powered by blockchain technology.

The plastic waste is rewarded with a deflationary utility token that can be used to swap for exclusive incentives and offers through a native wallet, like a free coffee or meal, or to mint nonfungible tokens with underlying data about recycled materials, such as its origin and type of plastic — providing an end-to-end traceability of the recycling process.

“Plastics from a specific event or venue could fetch an even higher price than a standard metric tonne of recycled plastic, as it would have all of the underlying data attached to it. So, brands and organizations could upcycle this plastic to produce limited edition kit or merchandise from key events,” Vogel told Cointelegraph, adding:

“By using blockchain technology, it becomes possible to create a digital trail that records every step of the recycling process, from the collection of waste to the sale of recycled materials.”

The concept earned Circularr’s team recognition as blockchain startup of the year at the European event. The startup also recently received a $50 million investment commitment from the alternative investment group GEM, providing liquidity and resources to pilot “Material Recycling Facilities.” 

Similar efforts have been seen in other areas related to environmental, social and governance (ESG) initiatives. Blockchain technology and automated systems are increasingly being utilized to improve the efficiency and accuracy of the carbon market, a critical component of the fight against climate change. Vogel also noted:

“Blockchain technology can help to address some of the challenges associated with recycling, such as the lack of trust between stakeholders and the difficulty in verifying the origin and quality of recycled materials.”

Circularr’s facilities and other collection points are planned to be deployed in train stations and freeway service stations across the United Kingdom, as well as subway stations and airports in the United States. Other partnerships with sports stadiums and events are also planned in countries in the Middle East and North Africa region. 

The startup’s upcoming efforts include the implementation of on- and off-ramps with partners to allow users to swap tokens for other cryptocurrencies and fiat money, as well as a track-and-tracing system planned for the second half of 2023.

Gamifying the recycling process is also one of the startup’s goals, targeting brands aiming to reward users with tokens and prizes for their recycled waste. “It all started with a Game Boy and a desire to make a difference,” said Vogel. “And now, here we are, working towards a better, more circular economy.”

Climate tech VC argues Bitcoin’s ESG positives outweigh its negatives 31:1

The Bitcoin network has a 31:1 positive to negative ratio, according to climate tech VC Daniel Batten.

A climate tech investor has painted a bright view of the Bitcoin network, suggesting its environmental positives outweigh its negatives by a whopping 31:1 ratio.

On Jan. 12, self-proclaimed philanthropist and environmentalist Daniel Batten claimed in a Twitter thread that “Bitcoin is probably the most important ESG technology of our time.”

According to Batten, the 31:1 positive impact ratio was calculated by researching and interviewing grid engineers, climate scientists, Bitcoin mining engineers, methane abatement experts and solar and wind installers.

The findings discovered 21 ways Bitcoin (BTC) could be environmentally positive and just five ways it could be environmentally negative.

Batten said that the findings were “uncannily similar” to those for the solar industry.

Many of the positives involved renewable energy grids and benefits from mining, such as being the leading technology for responding to grid power demand from over and undersupply. Depending on power demand constraints, Bitcoin mining farms can switch on or off.

Additionally, BTC mining can be a solution for geographic curtailment. Power curtailment is a deliberate reduction in the output below what could be produced to balance energy supply and demand, or due to transmission constraints.

There are also benefits in innovation and methane reduction, according to Batten’s findings.

BTC mining can be used to reduce vented landfill gas and flare gas emissions by using this otherwise wasted energy to power rigs.

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The handful of negatives included network emission levels, e-waste production and the opening up of previous fossil fuel sites. However, the environmental positives far outweighed these negatives, according to Batten, who opined:

“Bitcoin mining’s rapid renewable adoption can inspire other industry sectors to follow.”

“We see Bitcoin mining can play a real part in global methane mitigation,” he concluded.

Related: Bitcoin could become a zero-emission network: Report

On Jan. 13, the South China Morning Post opposed the notion that Bitcoin was good for the environment, by reporting that BTC accounted for 86.3 million tons of carbon dioxide emissions in 2022.

However, it did acknowledge that Ethereum saw its CO2 emissions drop from 21.95 million tons in 2021 to 8,824 tons last year, according to the data from Forex Suggest. Ethereum’s switch to proof-of-stake in September 2022 reduced network power consumption by 99.98%.

Institutional appetite continues to grow amid bear market — BitMEX CEO

Institutional appetite for Ethereum will grow now that the network is ESG compliant, according to the BitMEX boss.

In a recent interview, BitMEX CEO Alexander Höptner shared his thoughts about institutional investors who, in his view, still have an appetite for crypto and Ethereum.

Speaking at the Token2049 conference in Singapore on Sept. 28, the crypto executive told Cointelegraph that there has not been a “single slowdown of institutional push into crypto” during this bear market.

He added that institutions and finance industry players typically use bear markets for innovation. There is a lot more pressure to deliver in a bull market, but bear markets offer the luxury of more time.

Höptner also commented that adoption for the finance industry has a long horizon which is why institutions will be buying and holding crypto assets while the opposite can currently be said for the retail sector.

When asked whether institutions or retail will end the bear market he said that retail is still pulling out whereas institutions are still making a push, before adding:

“I think that the institutions are making themselves ready now to provide the services and retail will come back and push it up again.”

The BitMEX boss is also convinced that institutions will start piling back into Ethereum now that it has switched to proof-of-stake and satisfies the Environmental, Social and Governance (ESG) concerns.

“Ethereum is the ideal protocol to build stuff on,” he commented before adding “this is the ideal public event to build financial products for ESG conformity,” in reference to the recently deployed Merge.

At the moment, ESG conformity is paramount, he said, adding that institutions “can offer products that are really for a wide audience once again while checking one of the boxes that they have for their compliance.”

Related: Three-quarters of institutions to use crypto in the three years: Ripple

The $3,000 figure was mentioned regarding Ether (ETH) prices by year-end, and Höptner sees this as a possibility, especially now that the network is more environmentally friendly and big banks are using it. At the moment, ETH is trading up 3.8% over the past 24 hours at $1,336, so it has a long way to go in the next three months.

Last week, Cointelegraph reported that liquid staking products such as Lido’s Staked Ether (stETH) are more profitable and capital efficient than holding regular ETH. As such, they will increase in popularity while hodling ETH could become obsolete.

Could Bitcoin miners’ troubles trigger a ‘death spiral’ for BTC price?

Forced selling from Bitcoin miners raises concern about BTC price, but the use of renewable energy and the oil and gas industry’s growing interest in BTC are longterm positives.

A July 9 post by @PricedinBTC on the “cost to mine Bitcoin” in the United States gathered the crypto community’s attention, especially considering the recent headlines that BTC miners have made. The crypto bear market and growing energy costs have caused a perfect storm for the mining sector and this has led some companies to lay off employees and others to defer all capital expenditures. Some went as far as raising concerns of Bitcoin miners hitting a “death spiral.”

However, Raymond Nasser, the CEO of Arthur Mining, a professional mining company operating in the United States told Cointelegraph that their margins don’t full concur with the data from @PricedinBTC.

Arthur Mining’s current capacity is 25 megawatts (MW) and the company focuses on environmentally friendly energy sources. At first, one could dismiss their numbers as listed companies like Marathon Digital Holdings have 300 MW plants, but these rely on the traditional grid energy — even if a portion of the power originates from hydro-electric plants.

To achieve the best environmental, social and governance (ESG) practices, the smaller scale mining operations utilize undervalued flare and stranded gas from the oil and gas industry. Their secret is mobile Bitcoin mining facilities, tapping greener, more efficient and more profitable energy sources compared to traditional solutions.

Regarding the $16,000 production cost for miners, Nasser said:

“These diagrams are extremely subjective. The biggest new projects in the industry are looking for off-grid solutions, and this diagram represents some of the most expensive on-grid energy costs used in urban areas. Our all-in energy costs are lower than $0.02 kWh in two different U.S. States.”

Electricity costs have doubled in the past year

Data from QuickElectricity shows that from March 2022 commercial electricity costs per kilowatt/hour (kWh) ranged from $0.08 to $0.09 in the U.S. state of Idaho, Utah, Virginia, Texas, Nevada, North Dakota, Nebraska and Oklahoma.

One of the strong points of the Bitcoin network is that it prioritizes efficiency, meaning, the labor intensive production process will always seek out the lowest operational costs and shift toward that. ASIC mining equipment is mobile, but more importantly, there is optionality for other energy sources. For example, these machines can be installed in containers, shipped to offshore oil and gas structures, and work with oscillating power sources.

To date, Upstream Data, a Canada-based manufacturer of Bitcoin mining data centers, builds portable Bitcoin mining equipment and infrastructure for natural gas without the need for any pipelines or midstream facilities. After deploying over 180 of these data centers, it is becoming clear that this activity is becoming mainstream.

Earlier this year, CNBC explored how renewable energy is used in the Bitcoin mining process and to date, Giga Energy Solutions, a natural gas Bitcoin mining company, have signed deals with more than 20 oil and gas companies, four of which are publicly traded.

Higher interest rates and Bitcoin’s collapse is hurting BTC miners

Regardless of the energy source, miners have been struggling with their balance sheets. Besides the impact of lower Bitcoin prices, financing has been a major hurdle across the industry. A July 7 Cointelegraph report examined how industrial-size Bitcoin miners owe some $4 billion in loans and some have been forced to liquidate their BTC holdings to cover capital and operational costs.

But not every mining company has access to traditional long-term bank financing. Thus, those firms created a riskier debt structure by offering their miners and infrastructure as collateral. As Bitcoin price plunged, so did the mining equipment prices, and in turn, worsening their financing conditions when they needed the most.

Blockware Solutions analyst Rich Ferolo expressed his concerns to Cointelegraph on June 28:

“For the s17s [ASIC miner], at $0.07 per kilowatt, BTC needs to be at around $18,000…. you’re going to see a lot of capitulation, insolvency and excess machines… It’s more about survival of the fittest.”

According to Nasser:

“We have always mitigated our convexity exposure by immediately reinvesting or liquidating our bitcoin balances on a weekly basis. We understand that with 70%+ ebitdas and high efficiency in most cases, being overly greedy by holding Bitcoin reserves can break your operation and cost you jobs, like we have seen in the past month”.

The mining industry has a problem, but its impact is limited

The industry clearly has a problem, but this could simply be a reflection of its infancy. Still, the impact of miners selling more Bitcoin than they have mined over the past couple of months may be creating additional pressure on the price of BTC.

This never-ending cycle reinforces the “death spiral” theory, but this oversimplification fails to consider that miners simply shut down their machines below a certain price threshold and that many will locate to areas with cheaper electricity costs or even seek out renewable options.

Although lowered mining activity effectively poses a short-term risk as the network becomes less secure, this risk is overstated because Bitcoin’s difficulty adjustment increases operational miners’ profitability. In short, the Bitcoin mining business does not pose a systemic risk for BTC price.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.