Former ASIC regulator Daniel Crennan backs BetaCarbon crypto emissions trading platform

Crypto trading platform BetaCarbon is nearing a launch, offering investors tokens tethered to Australian carbon credits in a bid to free up trading in emissions.

BetaCarbon CEO Guy Dickinson, right, with son and co-director Jules Dickinson.

Former regulator Daniel Crennan is one of several key backers in a push to use a cryptocurrency platform to allow investors to buy into a carbon trading scheme.

Mr Crennan, former deputy chair of the Australian Securities & Investments Commission, quietly signed on to represent budding trading platform BetaCarbon in November.

This has seen Mr Crennan representing BetaCarbon in the halls of power as it shapes up for a March launch.

BetaCarbon, the brainchild of former HSBC markets and securities services head Guy Dickinson and son Jules, is set to open up access to trading in a cryptocurrency token pegged to Australia’s carbon emissions trading scheme.

BetaCarbon creates digital tokens tied to Australian carbon credit units that are issued when green generation projects capture or reduce emissions.

The trading platform is banking on a growing push by businesses and consumers to offset their carbon emissions.

BetaCarbon buys the units, then sells the tokens to users who can trade them, circumventing the complex and largely closed carbon trading operations already in place.

Already, before its hard launch, BetaCarbon has sold $2.5m in tokens taking 52 million kg of CO2 allowances off the market.

Mr Dickinson said recent movements in prices for carbon credits pointed the way.

“It’s clear the demand is there. We have a very clear stated purpose that we’d like to incentivise more carbon farming.”

The former banker said BetaCarbon would make its money through adding a margin to the tokens over the cost of the carbon credits, but stressed the low cost of entry to buying the credits for customers would compensate it.

“When we’re considering what a corporate might pay on the spot price we’re still 50 per cent cheaper than what the incumbent brokers are offering today,” he said.

“We’ve disintermediated the margins, we make money from the token, we add our margin and sell it to you.”

The price of Australian Carbon Credit Units has soared in the last year. The Clean Energy Regulator recently flagged a 24 per cent lift in demand for the units and other offsets trading on secondary markets. Over the last year the price of the units leapt from $15 to $45.

Mr Dickinson said the credits would be popular among corporates looking to hedge emissions.

“When you see the pace of people signing up for global pledges and the relative value of the Australian unit vs. international units it’s pretty clear the value can go higher,” he said. “Once you sign up to carbon neutral goals it’s hard to wind that back.”

Mr Dickinson said he’d first started considering the idea in March 2021 and by September he’d put in his resignation at HSBC. January 1 was his first official day at BetaCarbon.

“My son (Jules) was quite big into it with me, I was looking at it with him, he was more than willing to lead it while I was still at HSBC,” Mr Dickinson said.

BetaCarbon recently kicked off a “heavily oversubscribed” $3m capital raising, which saw keen interest from energy generators.

Mr Dickinson said he envisaged the platform being used by shoppers, or concerned citizens, to buy tokens to offset their emissions. He said the platform was popular with the regulators, who liked the idea of opening access to trading in the tokens tied to carbon credit units.

Daniel Crennan QC, former ASIC deputy chair.

As part of its plans BetaCarbon brought in Credi Consulting and Mr Crennan. “I knew that Dan would be extremely well versed in this space, he’s a smart individual whose fronted all these regulators in the past,” Mr Dickinson said. “When you put good people together great things can happen.”

As part of its deal with BetaCarbon, Credi Consulting has secured a small holding in the company.

Mr Crennan has also laid out the case for BetaCarbon to New Zealand regulators. BetaCarbon is also scoping out access to Canadian and British markets. “Having been a regulator I know the benefit of early engagement,” he said. “From a government perspective these types of uses of tokenisation ought be attractive.”