For the VCM to succeed, it must scale like financial markets did

The voluntary carbon market (VCM) is gaining momentum, but to scale with confidence, it needs the same trusted infrastructure that helped financial markets mature.

We have seen this story before; financial markets did not emerge fully formed. They matured over decades, shaped by hard lessons and infrastructure reform. The bond market, for example, once operated entirely over the phone. Transactions were bilateral, trust was personal, and price discovery was opaque at best. It took years of market evolution to reach today’s institutional environment where trades are conducted across shared rails with consistent rules, visibility and confidence. The VCM needs the same evolution if it is to reach anything close to its incredible potential.

A structural imbalance

As it stands, the VCM is dominated by sellers. Demand can be thin, fragmented across geographies and intermediaries, with little coordination or consistency. There is no central source of truth for pricing, and no common venue where buyers and sellers reliably meet. Information asymmetry abounds. This not only limits participation, but it also distorts pricing and enables friction that extracts value from every transaction.

Liquidity in financial markets improved only when counterparties began to operate across shared systems. In the early days of credit derivatives, for example, participants struggled with unidirectional flow: sellers flooded the market but found no equivalent demand. The turning point came when infrastructure caught up. Standardised contracts, indices and trusted platforms enabled credible two-way flow. Scale followed, price transparency improved, risk could be managed and redistributed. The voluntary carbon market needs to move the same way: from scattered bilateralism to reliable institutional structure.

Trust is earned, not assumed

At the heart of any market is trust. Not only in counterparties, but in the systems that connect them. In the VCM, that trust is delicate. Concerns about asset provenance, double counting and limited price visibility create real barriers to adoption. For a market built on impact, these are more than technical shortcomings, they are existential risks.

Carbonplace is a shared platform, backed by leading financial institutions, that allows carbon credits to be treated like any other asset: managed securely, traded with confidence and reported with clarity.

Through Carbonplace, buyers and sellers can transact and build a portfolio directly across multiple registries, with full control and traceability. Legal title remains with the seller until payment is confirmed. Each trade is linked to a unique serial number and an immutable audit trail. This is not innovation for its own sake, it is the kind of market-grade infrastructure that capital markets have long relied on to ensure integrity and reduce risk.

Delivery versus payment: the financial standard

In financial markets, delivery versus payment (DvP) is a cornerstone of credibility. It ensures that neither counterparty completes a transaction unless both sides are fulfilled. The carbon market has lacked this standard for too long. Escrow accounts, where used, carry their own risks, particularly when providers lack the capital strength or oversight to match the assets they hold.

Carbonplace eliminates this risk by design. Assets remain with the seller and are only transferred once the seller confirms receipt of funds. This model draws directly from bond markets, where DvP is non-negotiable. The result is greater protection, fewer intermediaries and a structure that can scale.

Infrastructure before regulation

There is no doubt that regulation will play a role in maturing the VCM. Disclosure requirements, audit standards and carbon accounting rules are all evolving. But regulation alone will not deliver confidence. It may mandate participation, but it cannot build the systems that make participation practical, efficient and safe.

Financial markets learned long ago that infrastructure often leads, and policy follows. Shared systems create clarity. Clarity creates confidence. Confidence creates activity. That activity then attracts the regulation needed to protect and formalise it. Carbon markets should not wait for legislation to catch up, they should build the systems now that allow the market to grow responsibly.

The foundation for a credible market

For carbon markets to reach their potential, they need to evolve from a fragmented ecosystem of platforms into a structured environment where assets can be traded, tracked and trusted. This is not a call for consolidation. It is a call for common standards, shared rails and infrastructure that reduces risk for all participants.

Carbonplace is helping to lay that foundation. Our platform enables institutional buyers and sellers to manage their carbon credit portfolios with the same control and confidence they expect from any other asset class. Verified titles. Transparent transactions. Multi-registry access. A reliable audit trail.

These are not radical innovations; they are familiar financial principles applied to an exciting new category. When trust is built into the system, confidence follows. And when confidence grows, scale becomes inevitable.