Matthew Le Merle is co-founder and Managing Partner of Fifth Era and Keiretsu Capital – the most active early stage venture investors backing almost 200 companies a year. He is Chairman of Securitize (Europe) and CAH, Vice Chairman SFOX and an advisor at Warburg Pincus.
He is also the Co-Author of Blockchain Competitive Advantage, a book that we highly recommend for both entrepreneurs and investors in the space that is available at Amazon, Apple, and Smashwords in hard and paperback, ebook and audible.
Recently, he has become the chairman of a new project the Universal Protocol Alliance.
It’s been nearly a year since our last interview, have you been happy with the pace of progress in digital assets and digital securities?
Antoine, it’s great to be talking to you again. I have learned a lot from reading Securities.io in 2020. Thank you for being a big believer and authority on digital monies and assets.
To answer your question, in most regards 2020 has greatly accelerated commitment to, and progress in digital monies and digital assets globally. The news has been coming fast and furious in this last quarter of the year. China, PayPal, Square, Bitcoin price, DeFi, Tudor Jones, Miller, the list goes on and on. For those of us working in crypto and blockchain sometimes the progress of the world’s sovereign entities and largest financial institutions may appear slow, but they are really coming onboard now and the pace is accelerating.
You’re currently chairman in a new project, what specifically is the Universal Protocol Alliance (UPA)?
Universal Protocol Alliance’s vision is that every asset class will be digitized and tokenized. We are an alliance of like-minded cryptocurrency companies and blockchain pioneers including Bittrex Global, CertiK, Fifth Era, Hard Yaka, Infinigold, Ledger, and Uphold. We have several mega digital assets about to launch, and I was happy to agree to Chair the alliance and help drive it forward.
Could you share the genesis story of the UPA?
I was not around back then, but I know that it has been a passion of many, including JP Theriot (CEO Uphold), and Greg Kidd (Founder Hard Yaka) who were the two who introduced me into the mix. The leadership of each of the alliance members believe that every asset needs to be digitized and that to do so requires a platform that is built for purpose. It’s taken a couple of years to do it, but today we know how to tokenize and transparently substantiate any asset. The UP Alliance is focusing on stablecoins and crypto commodities and has already successfully issued Universal Gold (UPXAU), Universal Dollar (UPUSD), Universal Bitcoin (UPBTC) and Universal Euro (UPEUR). All are wrapped tokens on the Ethereum Network and feature transparent value substantiation with a public record of the underlying collateral.
On December 1, 2020, the UPA launched Universal Carbon (UPCO2) the world’s first tradable carbon token. Can you discuss what this token is?
Universal Carbon is the easiest, most accessible, safe and trustworthy way for anyone to buy, hold, burn or sell a REDD+ rainforest carbon credits. More specifically, UPCO2 Tokens are tokenized voluntary carbon credits built on the Ethereum blockchain. Each UPCO2 Token represents one-year-tonne of CO2 emissions averted, substantiated by Verified Carbon Units in the registries of Verra and other leading standards agencies, with real-time transparency ensured by ‘wrapper’ ERC-20 tokens built by the Universal Protocol Alliance.
How do voluntary carbon credits offer economic advantages compared to regulated credits?
If by regulated credits you are referring to government issued carbon allocations for the cap and trade markets, they are important and I am an advisor at Spark Change which is tokenizing those too. However, UPCO2 is backed specifically by carbon credits that have been issued to parties who are helping save or protect the world’s great rainforests in Africa, the Americas and Asia.
The two are like apples and oranges – very different but both still types of fruit. Whether you buy government issued carbon allocations or voluntary REDD+ carbon credits you are taking an important step to put pressure on polluters to move towards clean practices. As the demand for carbon allocations and/or credits increases, either the price rises making polluters pay more for their emissions, or more carbon credits need to be supplied. In the case of REDD+ that means more demand for projects that are protecting the world’s rainforests, which in turn increases the flow of capital to these worthy projects.
Of course, governments decide how many carbon allocations they decide to issue, whereas, REDD+ carbon credits are ultimately a scarce resource.
The UPA has a large network of partners, how will this network assist with the growth and liquidity of the UPCO2 tokens?
We intend UPCO2 to be a valuable addition to the offerings of every digital wallet and exchange and we welcome the opportunity to partner with them. Climate change is an issue of such importance that we have chosen to design UPCO2 to be easily accessible and usable by everyone who wishes to make it available to their clients and users.
It is important to note that every survey I have seen of digital natives, millennials, cryptocurrency fans and so on consistently says that between 70 and 90% rank climate change as one of the issues that they care most about. I think that ANY digital wallet, exchange or account, whether offered by crypto or traditional institutions that does not provide a solution to supporting this important topic faces the risk of being considered anti-environment and perhaps a climate change denier.
What are your predictions for 2021?
We have just recorded our top 10 2021 blockchain predictions and they can be found at www.blockchaincoinvestors.com. To give you some highlights, China will go into full rollout of the digital yuan, banks will scramble after PayPal and Square since they now run the risk of bleeding customers if they don’t, and crypto commodities will become the preferred way of investing in precious metals, rare earths and of course carbon credits. There is lots more to learn in our top 10 list of course.
Is there anything else that you would like to share regarding either the UPA or UPCO2?
The UPA believes that every asset class will be digitized and tokenized. It has been a lot of work, but today the UPA platform has reached a level of development whereby if you want to create a utility token, tokenized commodity, proprietary digital currency, or a substantiated token of any kind, we can create it for you within weeks – the process normally takes months, if not years – since we have a fully operational Token Factory.
Once we began talking about the global climate crisis and the inaccessibility of rainforest carbon credits to most people who care, it was quite natural for us to decide to launch the world’s first tokenized carbon credit.
I have been quoted as saying “This was a light bulb going on for me. Combine a digital asset with a rainforest carbon offset and give everyone in the world access. How could that not be a great idea?” I believe this.