JPMorgan Chase is taking concrete steps toward tokenizing carbon credits, partnering with S&P Global and environmental registries through its Kinexys blockchain unit. The move comes as the US Securities and Exchange Commission, under new Chair Paul Atkins, shifts toward a more supportive regulatory approach. In recent comments, Atkins described tokenization as an innovation worth advancing. JPMorgan’s Kinexys Division Pilots Blockchain-Based Carbon Credit Tokenization with Global Partners In a strategic push to modernize and streamline the global carbon credit ecosystem, JPMorgan’s blockchain arm, Kinexys, is testing a new application designed to tokenize carbon credits in partnership with industry leaders S&P Global Commodity Insights, EcoRegistry, and the International Carbon Registry (ICR). The collaborative effort aims to address persistent challenges in the voluntary carbon market—namely fragmentation, opacity, and lack of standardization—through blockchain-powered transparency and interoperability. According to a company release on Tuesday, the pilot project is designed to create a unified digital infrastructure for carbon credits, potentially reshaping the way corporations, governments, and environmental stakeholders manage and trade carbon emissions allowances. “Tokenization could support development of a globally interoperable system that adds confidence into the integrity of the underlying infrastructure,” said Alastair Northway, Head of Natural Resource Advisory at J.P. Morgan Payments. Tackling Complexity in a Fragmented Carbon Market Carbon credits represent verified units of carbon emission reductions generated by projects such as reforestation, renewable energy, or carbon capture initiatives. These credits are critical for helping companies meet sustainability goals and comply with environmental regulations. However, the market has long struggled with fragmentation across registries, inconsistent data formats, and concerns about double-counting or the legitimacy of credits. Kinexys’ blockchain application seeks to digitize and standardize the entire lifecycle of carbon credits—from issuance to retirement—on a secure, transparent, and interoperable platform. The technology is being developed to enable greater confidence and efficiency in carbon credit trading, while also aligning with global ESG mandates and net-zero initiatives. The testing initiative will focus on several key components: Account creation and credit lifecycle management Technical compatibility with existing registry systems Real-time tracking and interoperability of carbon assets EcoRegistry and ICR have already completed initial tests using Kinexys’ platform integrated with their own registry infrastructure. S&P Global, through its registry-as-a-service model, will begin tests in the coming phases. All three partners will also evaluate the broader feasibility of leveraging Kinexys’ tokenization solution in a real-world environment. Laying the Foundation for Tokenized Carbon Assets The application under development by Kinexys is expected to handle complex data structures and ensure compatibility across various carbon registries. If successful, this could reduce duplicative verification processes and enhance the auditability of carbon offsets—factors that have limited broader institutional adoption in the past. The testing phase is critical in evaluating how well Kinexys’ solution integrates with existing carbon registries while maintaining compliance with global reporting standards. In tandem with the carbon credit initiative, JPMorgan is also reportedly preparing to launch a stablecoin-style deposit token dubbed JPMD on the Base network, Coinbase’s Ethereum Layer-2 solution. The deposit token would represent fiat deposits on-chain and be used to facilitate settlement and payments in tokenized environments—potentially marking the first time Kinexys deploys a major application on a public blockchain. If the deposit token and carbon tokenization platform both gain traction, Kinexys could emerge as a cornerstone in JPMorgan’s long-term vision for blockchain-powered financial infrastructure. SEC Chair Paul Atkins Declares Tokenization a Core Innovation, Marking a Regulatory Shift in US Crypto Policy Meanwhile, US Securities and Exchange Commission (SEC) Chair Paul Atkins officially declared tokenization as an “innovation” to be fostered, not feared. During a Wednesday interview on CNBC, Atkins laid out a stark contrast between the SEC’s new stance and the agency’s previous leadership, marking a significant pivot away from enforcement-heavy crypto policies and toward transparent, innovation-forward regulation. “Tokenization is an innovation,” Atkins emphasized . “And we at the SEC should be focused on how do we advance innovation in the marketplace.” The declaration comes just months after Atkins, a longtime advocate for financial innovation, was sworn in as SEC chair following his nomination by President Donald Trump on Inauguration Day. His remarks reflect not only his own regulatory philosophy but also a broader shift within Washington, where tokenization and digital asset adoption are increasingly seen as critical components of future financial infrastructure. Atkins was direct in his critique of the previous SEC administration under former Chair Gary Gensler, who drew criticism for relying on “regulation through enforcement” — often pursuing high-profile legal cases against crypto companies without providing clear guidelines. “That day is over,” Atkins stated. “My whole goal is to make things transparent from the regulatory aspect and give people a firm foundation upon which to innovate and come out with new products.” This marks a turning point for the SEC, whose historical ambiguity toward crypto had prompted startups and even established financial institutions to either leave the US market or delay digital asset offerings due to legal uncertainty. Tokenization’s Ascendancy in Traditional Finance Tokenization — the process of issuing blockchain-based representations of real-world assets (RWAs) like bonds, equities, or real estate — is becoming one of the fastest-growing segments of the crypto economy. A recent RedStone report reveals that the total value of tokenized RWAs exceeded $24 billion in the first half of 2025, with US Treasurys and private credit leading the charge. According to RWA.xyz, this represents one of the most significant developments in crypto finance since the inception of stablecoins. The growth of the tokenized RWA market (Source: RWA.xyz ) The trend is also endorsed by global institutions. The World Economic Forum recently praised tokenization as a “bridge” between blockchain technology and traditional finance, citing its potential to streamline settlement, reduce costs, and democratize investment. Under Atkins’ leadership, the SEC is not just talking the talk — it’s walking it. In April, the agency’s Division of Corporation Finance issued guidance clarifying when and how digital asset issuers must disclose information, especially regarding tokens that may fall under securities law. The goal: provide clear guardrails so legitimate innovation can thrive without fear of legal reprisal. Crypto firms, traditional banks, and fintech startups are all re-evaluating their US strategies in light of the SEC’s new direction. With a regulatory foundation now forming, experts believe tokenization could be the linchpin for digital finance in the 21st century — allowing real-world value to be issued, transferred, and settled seamlessly across global blockchains.