Carbon Credits Enter Regulated Finance: How the UK Carbon Registry and Archax Are Tokenising a New Asset Class
Updated: Oct 7
On 6 May 2026, the UK Carbon Registry announced a partnership with Archax, the FCA-regulated digital asset exchange and custodian, to launch a new regulated note structure that brings institutional investors into the voluntary carbon credit market through tokenised securities. The partnership is the first regulated structure of its kind to integrate verified carbon credits with UK digital securities infrastructure, and it opens a category that has long struggled to attract institutional capital because of an absence of regulatory legibility.
For a sector watching tokenisation move from financial instruments into physical world assets, this is a meaningful development. Carbon credits have historically suffered from opacity, fragmentation and a lack of standardisation that has kept large pools of capital on the sidelines. Tokenisation combined with regulated issuance infrastructure is one mechanism for resolving that.
How the Structure Works
The partnership uses a regulated note structure rather than a token representing the underlying carbon credit directly. Archax provides custody and distribution through its FCA-regulated infrastructure, enabling institutional and professional investors to access the product via established market frameworks. The note is structured in collaboration with GenTwo, issued as a tracker certificate with an ISIN and listed on the SIX Swiss Exchange.
The first issuance is backed by PURE Carbon, a high-impact water conservation and emissions reduction project. Emissions data is captured at source and processed securely before being structured into the note. This approach addresses one of the core criticisms of voluntary carbon markets: the absence of verifiable, auditable data linking the underlying environmental project to the financial instrument.
Why Archax and Why Now
Archax has been building a track record as the UK's most active regulated digital asset custodian for institutional-grade tokenised securities. Its prior transactions include a tokenised UK Gilt purchased by Lloyds Banking Group using tokenised deposits on the Canton Network, and a partnership with Federated Hermes to tokenise UCITS money market funds. The UK Carbon Registry partnership extends this infrastructure into a new asset class.
The timing reflects a broader shift in how institutional capital is approaching the voluntary carbon market. MiCA's implementation across the EU, combined with the FCA's increasingly detailed guidance on digital securities, has created a window in which regulated note structures can give institutional investors carbon exposure within compliance frameworks they already understand.
The Market Context
The voluntary carbon market has been under pressure since investigative reporting in 2023 and 2024 raised questions about the verifiability of credits from several major standards bodies. Institutional appetite never disappeared but became more selective. Structures that offer verifiable emissions data, regulated distribution and secondary market potential are precisely what sophisticated allocators have been waiting for.
For UK institutions with net zero commitments and restrictions on holding unregulated instruments, a tokenised regulated note with an ISIN and exchange listing resolves the compliance barrier cleanly. For carbon project developers, access to institutional capital at regulated market terms is a meaningful improvement on the fragmented over-the-counter market that has historically characterised voluntary carbon trading.
Key Takeaways
UK Carbon Registry and Archax have launched a regulated note structure for tokenised carbon credit-linked securities, the first of its kind in the UK regulated market.
Archax provides FCA-regulated custody and distribution, with notes listed on the SIX Swiss Exchange with ISINs.
The first issuance is backed by PURE Carbon, a verified water conservation project with emissions data captured and processed at source.
The structure addresses institutional compliance barriers by delivering carbon exposure through a format investors already understand.
The partnership extends Archax's growing track record in tokenised UK financial products into environmental assets for the first time.
How we got here
UK Carbon Registry says it set out in 2021 to build a regulatory and institutional pathway for carbon-linked assets, working under United Nations and ISO climate management and governance processes. Its finance director, Adrian Fraine, described the Archax note as the completion of that pathway. The underlying PURE tokens run on Flowchain, and the note itself gives investors exposure without requiring them to hold those tokens directly.
Policy has moved in parallel. In November 2024 the Chancellor announced six principles for the use of voluntary carbon and nature credits, starting with using credits in addition to ambitious action within value chains and using only high integrity credits. The Department for Energy Security and Net Zero then consulted on raising market integrity between 17 April and 10 July 2025, receiving 200 responses. A summary of those responses was published on 26 March 2026. It records proposals to recognise the VCMI Claims Code and to endorse the ICVCM Core Carbon Principles as a minimum quality requirement.
Key facts at a glance
Instrument: tracker certificate with an ISIN, structured with GenTwo and listed on the SIX Swiss Exchange.
Underlying: PURE Carbon, a water conservation and emissions reduction project, with tokens powered by Flowchain.
Investors: institutional and professional only.
Stated use cases include corporate compliance and reporting linked to emissions trading and the EU and UK Carbon Border Adjustment Mechanism.
Archax spokesperson: Nick Donovan, chief commercial officer.
UK integrity consultation: 200 responses, summary published 26 March 2026.
What it means for UK founders
The wrapper matters more than the token. This product reaches institutions by wrapping a tokenised environmental asset inside a familiar listed certificate, issued through a Swiss structuring platform and held through a UK regulated custodian. Founders tokenising climate or nature assets may find that a listed note route is faster than seeking new permissions, although it limits the audience to professional investors. Anyone considering a similar structure may want to take professional advice on whether it involves regulated activity under FSMA.
Integrity standards are becoming the entry ticket. If the government follows through on endorsing the ICVCM Core Carbon Principles as a minimum quality bar, credits that cannot meet them will struggle to find institutional buyers whatever the technology. Data captured at source, as in the PURE Carbon issuance, is the kind of evidence those buyers and their auditors will ask for.
Sources
Frequently asked questions
What did the UK Carbon Registry and Archax announce?
On 6 May 2026 the UK Carbon Registry announced a partnership with Archax to launch a regulated note structure that brings institutional investors into the voluntary carbon credit market through tokenised securities. It is the first regulated structure of its kind to integrate verified carbon credits with UK digital securities infrastructure.
How does the Archax carbon credit note structure work?
Rather than a token representing the carbon credit directly, it uses a regulated note structured with GenTwo, issued as a tracker certificate with an ISIN and listed on the SIX Swiss Exchange. Archax provides custody and distribution through its FCA-regulated infrastructure.
Which carbon project backs the first UK Carbon Registry and Archax issuance?
The first issuance is backed by PURE Carbon, a high-impact water conservation and emissions reduction project. Emissions data is captured at source and processed securely before being structured into the note.
What other tokenised products has Archax worked on?
Archax's prior transactions include a tokenised UK Gilt purchased by Lloyds Banking Group using tokenised deposits on the Canton Network, and a partnership with Federated Hermes to tokenise UCITS money market funds. The carbon partnership extends its infrastructure into environmental assets for the first time.
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