Digital asset hedge fund One River has submitted an ETF application with the United States Securities and Exchange Commission. The firm is seeking to launch a Bitcoin exchange-traded fund that allows the purchase of carbon credits.
Back in April, One River made public its plans to launch a carbon-neutral Bitcoin trust when it partnered with MOSS, a carbon credit platform. At that time, CEO Eric Peters told Bloomberg that "there’s a lot of talk about the carbon footprint… We decided it’s time to stop talking and start doing something about it."
As per the SEC filing on Monday, shares of the One River Carbon Neutral Bitcoin Trust will trade on the New York Stock Exchange. The product will track the performance of Bitcoin relative to the performance of the MVIS One River Carbon Neutral Bitcoin Index. An excerpt from the filing reads:
The Index is constructed using bitcoin price feeds from eligible bitcoin spot markets and volume-weighted median price average (“VWMP”), calculated over 20 intervals in rolling three-minute increments with adjustments to reflect the current spot price of carbon credits necessary to offset the estimated carbon footprint attributable to each bitcoin. The Index is designed to reflect the performance of bitcoin in U.S. dollars on a carbon-neutral basis.
One River goes further to explain:
The Trust intends to offset the carbon footprint associated with bitcoin by purchasing and retiring carbon credits necessary to account for the estimated carbon emissions associated with the bitcoins held by the Trust. The Trust has entered into an agreement with LIRDES S.A. (doing business as Moss Earth) (“Moss”), a company located in Uruguay, to purchase MCO2 tokens representing certified reductions in greenhouse gas emissions. The MCO2 tokens issued by Moss are assets encrypted and tokenized utilizing blockchain technology and are stored on a registry managed by Verra, an organization that establishes and manages standards and programs in connection with carbon credits (“Verra”).
The digital asset hedge fund could not have picked a better time to launch a “carbon-neutral” Bitcoin ETF. There has been growing debate on Bitcoin’s energy usage and carbon footprint. Tesla, in particular, recently had to stop accepting Bitcoin as payment for its cars on the grounds of its high energy consumption. However, some critics have argued that the move to use carbon offsets with financial products is merely a gimmick with no real impact on energy consumption rates.