Photo by Marek Piwnicki on Unsplash
The global carbon credit market is expected to surpass $100 billion by 2030, but trust and transparency issues—including greenwashing, fraud, and double-counting—remain persistent challenges. While blockchain has been positioned as a solution for traceability and accountability, institutional adoption has been slow due to regulatory uncertainty and a lack of integration with existing financial structures.
Fedrok AG, a Swiss-registered blockchain company focused on bridging the gap between Web3 technology, institutional finance, and ESG compliance. With its “Proof of Green” consensus mechanism, Fedrok ensures that only verifiable, emissions-reducing activities generate new digital assets, setting a new benchmark for accountability in carbon markets.
We sat down with Walid Ouhida, Founder and President of Fedrok AG, to discuss the challenges facing blockchain-based carbon credits, regulatory roadblocks, and the future of ESG investing.
Before we dive into the specifics, can you give us a bit of background? What inspired the creation of the company, and what problem were you aiming to solve?
Walid Ouhida: After decades in global business, I became increasingly disillusioned with how businesses prioritize profits over the planet and people. I saw firsthand how companies prioritized profits over sustainability, making superficial commitments while continuing to exploit natural resources.
Even when presented with sustainable alternatives, many businesses rejected them because they weren’t the cheapest or most immediately profitable. That’s when I realized: technology could fix this broken system.
I founded Fedrok AG to bring trust and transparency to the carbon market using blockchain technology. Instead of relying on unclear registries, we tokenize verified carbon credits, ensuring that every transaction is traceable, fraud-proof, and aligned with real-world sustainability efforts.
The carbon credit market is expected to surpass $100 billion by 2030, yet concerns over greenwashing, fraud, and double-counting persist. What are the biggest trust and transparency challenges in today’s carbon markets? Why have institutions been hesitant to adopt blockchain-based carbon credits?
Walid Ouhida: I totally agree with you on this, and it’s something we have spent considerable time and money trying to understand at Fedrok AG. Despite the clear benefits of blockchain for carbon markets, such as eliminating fraud, improving traceability, and reducing inefficiencies, large institutions have been slow to embrace the technology. Having worked in global business development for decades, I understand why institutions are cautious when it comes to adopting new technologies, especially in highly regulated and complex markets like carbon credits.
First, there’s a lack of clear regulatory guidance. Carbon markets are heavily influenced by government policies, and institutions don’t want to adopt a system that might not align with future regulations. Until regulators provide clear guidelines, many institutional players will continue to wait on the sidelines rather than take risks.
Second, verification concerns. For blockchain-based carbon credits to gain institutional trust, they must integrate with existing verification and certification bodies. That process is still evolving, which is why we built Fedrok AG, to create a solution that bridges blockchain with real-world compliance standards.
Blockchain has been positioned as a tool for transparency, but it has struggled with institutional adoption. What are the regulatory barriers preventing large-scale adoption of blockchain-based carbon credits? Why has blockchain alone not been enough to solve ESG transparency issues?
Walid Ouhida: Blockchain is a powerful tool for transparency and efficiency, but regulatory uncertainty remains the biggest burden to institutional adoption. Blockchain ensures traceability and fraud prevention, but real transformation requires strong regulation, credible verification, and institutional buy-in.
For blockchain-based carbon credits to scale, governments, carbon registries, and industry leaders must work together to establish clear legal frameworks, compliance mechanisms, and interoperability standards. Only then will institutions fully embrace the future of tokenized carbon markets.
That’s exactly what Fedrok AG is working to solve, building a blockchain-based solution that aligns with real-world verification systems.
Fedrok AG has taken a different path by prioritizing compliance and institutional trust. How does the ‘Proof of Green’ mechanism ensure carbon credits are verified and backed by real-world actions?
Walid Ouhida: Unlike other projects that simply tokenize existing carbon credits, our Proof of Green (PoG) consensus mechanism ensures that new tokens are only created when new, clean Bitcoin is mined.
What sets us apart is that our blockchain is directly tied to real-world carbon reduction efforts. Instead of relying on traditional carbon registries or unverifiable claims, we integrate Bitcoin’s full ledger into our blockchain, allowing us to track exactly which miners are using renewable energy sources. Only verified “green” Bitcoin miners can generate Fedrok tokens, ensuring each coin represents a measurable emissions reduction.
This process is embedded in our consensus mechanism, which mints Fedrok tokens exclusively when a provably clean Bitcoin is mined. This eliminates double-counting, fraud, or unverifiable carbon credits, which are some of the biggest issues in today’s carbon markets.
By combining blockchain technology with verified environmental impact, we’re not just digitizing carbon credits, we’re ensuring that every token minted reflects real sustainability efforts. This approach provides trust, accountability, and compliance for institutions looking for reliable, ESG-backed digital assets.
Many blockchain projects operate in unregulated environments, but Fedrok is Swiss-registered and aligned with financial oversight. How does Swiss regulatory compliance help build trust in ESG finance?
Walid Ouhida: Switzerland is a global leader in financial regulation, making it one of the most trusted jurisdictions for sustainable investments. The Swiss Financial Market Supervisory Authority (FINMA) enforces strict anti-money laundering (AML) and Know Your Customer (KYC) regulations, reducing fraud and improving traceability in ESG transactions.
Beyond compliance, Switzerland has positioned itself as a hub for blockchain innovation. With the Swiss DLT Act, tokenized assets like carbon credits are given a clear legal framework, reducing regulatory uncertainty and making institutional adoption more viable.
Switzerland also aligns with key global ESG policies, including the EU Sustainable Finance Disclosure Regulation (SFDR) and the Task Force on Climate-Related Financial Disclosures (TCFD), ensuring that Swiss-regulated ESG solutions meet international standards.
By operating under Switzerland’s strict regulatory framework, Fedrok enhances its credibility, ensuring that its blockchain-based carbon credits are not only technologically advanced but also legally and financially compliant. This reduces the risks of market manipulation, greenwashing, and fraud, making our platform more appealing to institutional investors.
With COP29 and evolving ESG regulations (like Article 6 of the Paris Agreement), the industry is shifting toward greater transparency. How do Fedrok’s compliance measures align with new global carbon credit regulations?
Walid Ouhida: The global carbon market is undergoing a transformation, with COP29 and Article 6 of the Paris Agreement pushing for greater transparency, accountability, and standardization in carbon credit trading. Fedrok was built with these principles in mind, ensuring full compliance with international regulatory frameworks and positioning itself for the future of carbon markets.
Article 6 is important because it lays the foundation for a unified global carbon market. It requires carbon credits to be accurately tracked, prevent double-counting, and have clear ownership records, all areas where blockchain technology is uniquely suited to provide solutions.
By leveraging an immutable blockchain ledger, Fedrok guarantees that every carbon credit is traceable from issuance to trade to retirement, creating a system that is verifiable, fraud-resistant, and auditable. This aligns perfectly with Article 6’s carbon market mechanisms, helping to build trust and compliance in international carbon trading.
Beyond Article 6, we’ve also aligned with key ESG regulatory frameworks, including the EU Sustainable Finance Disclosure Regulation (SFDR) and the Task Force on Climate-Related Financial Disclosures (TCFD). These emphasize clear ESG reporting and transparency. This integration ensures that our blockchain-driven carbon credits meet institutional requirements while maintaining the highest environmental integrity.
While blockchain alone cannot fix carbon markets, combining regulatory compliance, institutional trust, and technological transparency creates a secure and scalable foundation for the future. That’s exactly what Fedrok is building, a transparent, verifiable, and compliant global carbon credit marketplace.
Do you believe tokenized carbon credits can become a global standard in green finance?
Walid Ouhida: Yes, absolutely. The future of carbon markets is digital, and blockchain-based credits will become the global standard, but only if they are fully verifiable, compliant, and integrated with real-world regulations.
Institutional finance is increasingly exploring tokenization, with projects from JP Morgan, BlackRock, and Goldman Sachs. How does Fedrok see traditional finance integrating tokenized ESG assets in the future?
Walid Ouhida: Banks and institutional investors are already moving toward tokenized ESG assets, and over the next few years, I anticipate broader integration of tokenized carbon credits into investment portfolios. Fedrok’s platform, with its blockchain-based tokenization, will make it easier for these institutions to invest in ESG assets, offering a clear digital record that can be seamlessly integrated into existing financial systems, reporting tools, and risk management frameworks.
Moreover, I see the potential for tokenized ESG assets to become a mainstream investment class, creating opportunities for liquidity and scalability in carbon credit markets. Traditional finance, already familiar with trading and managing financial instruments, will embrace blockchain as an efficient method for tokenizing and trading carbon credits and other ESG assets in a globalized market. This would provide institutions with more liquid markets, better price discovery, and risk mitigation tools to integrate sustainability into their core investment strategies, thus allowing them to meet both financial and climate-related objectives more effectively. I believe that through regulatory clarity and continued market maturation, tokenized ESG assets will become an essential part of the global financial ecosystem, helping institutions meet both sustainability targets and investor demands for responsible, impactful investments
Fedrok is positioned at the forefront of this transformation, providing a compliant, trusted, and scalable ESG investment solution.
What role do governments, enterprises, and Web3 projects need to play in making blockchain-based carbon markets viable?
Walid Ouhida: For blockchain-based carbon markets to succeed, governments must regulate, enterprises must adopt, and Web3 projects must build. Only through collaboration and alignment with global climate goals can blockchain technology revolutionize carbon markets, making them more transparent, efficient, and impactful in the fight against climate change.
Looking ahead, what role will blockchain play in ESG investing and carbon markets over the next five years? What do enterprises, investors, and institutions need to know about entering this space?
Walid Ouhida: By 2030, blockchain will be deeply embedded in sustainable finance, serving as the trust layer that ensures ESG investments are transparent, verifiable, and impactful. As institutional investors, enterprises, and policymakers push for data integrity and fraud prevention, blockchain’s role will evolve from experimental to essential, making ESG finance more accountable, efficient, and globally interconnected.
The future of blockchain in carbon markets will be shaped by regulatory developments, institutional adoption, and technological advancements. Enterprises, investors, and institutions entering this space must ensure compliance with evolving global standards, such as Article 6 of the Paris Agreement, ICROA, and VCMI, which aim to prevent greenwashing and double counting.
While blockchain provides transparency and traceability, trust still requires third-party verification from established carbon registries, such as Verra and Gold Standard. As AML/KYC regulations tighten, enterprises must choose regulated blockchain infrastructures that align with financial and sustainability reporting frameworks to ensure credibility.
Institutional adoption will accelerate the mainstreaming of tokenized carbon credits, integrating them into green bonds, ESG-linked loans, and financial markets. Additionally, AI and smart contracts will enhance real-time emissions tracking and automated compliance, while decentralized exchanges will increase liquidity and accessibility in carbon trading.
The shift toward interoperable blockchain networks will also allow seamless integration with traditional finance and corporate ESG strategies, making blockchain a core infrastructure for trusted, scalable, and efficient carbon markets.
