By Tiaan Booyens
What if removing carbon from the atmosphere was as easy as paying for a cup of coffee? Well, thanks to the new digital currency toco, it quite literally is.
Toco is money as tonnes of carbon stored in a digital wallet on your phone that turns everyday purchases into climate action. This digital currency is quickly taking root in Stellenbsosch, despite a growing public scepticism towards anything that sounds like cryptocurrency. I interviewed Paul Rowett, toco co-founder and current CEO, who also co-founded Lobster Ink (an ed-tech platform designed for the hospitality industry), did some research, and even used toco to pay for after-work drinks. Let me attempt to answer any whats, hows and huhs you might also have about toco.
How does toco remove carbon from the atmosphere?
Essentially, the answer is simple: toco creates more demand for carbon offsetting. Carbon offsetting is the reduction or removal of carbon dioxide emissions or other greenhouse gasses from the atmosphere. These carbon offsets receive verifiable certificates that are monetized in the carbon market.
Each toco in circulation (e.g. between your phone and the barista at your local café) represents one certified tonne of carbon permanently removed from the atmosphere. By buying tocos to spend, save, or trade – individuals can participate in creating more demand for carbon offsetting.
Does toco ensure carbon is removed from the atmosphere?
Tocos are minted and verified by The Carbon Reserve, which according to their website, is “a Swiss-based not-for-profit foundation set on expanding the global carbon market”. The Carbon Reserve acts as a central bank where all of toco’s carbon offset certificates, or carbon credits, are stored on behalf of all users.
According to Rowett, The Carbon Reserve buys the highest quality of carbon credits to increase the demand for efficient carbon offset projects. The first toco issuances were made possible by purchasing carbon credits from the Walker Bay Conservancy’s Grootbos Carbon Project in the Overberg Municipality, and from the Makira Wildlife Conservation Society in Makira, Madagascar.
The toco team strives to deliver a digital currency based on carbon offsetting with transparent, verifiable climate action impacts to avoid perpetuating a greenwashed market of worthless carbon credits. According to Rowett, The Carbon Reserve therefore independently risk rates each asset that it buys, and commits to holding an excess of carbon credits in relation to tocos when there is any doubt in a carbon credit’s validity. Assets are stored on a blockchain register that anyone on toco can see at any time.
(Read this recent Guardian article for more on the importance of reliable carbon markets .)
Is toco a cryptocurrency?
In short: no.
Toco isn’t an anonymous, decentralised, and unmonitored cryptocurrency, but a purposely transparent use of blockchain technology as a payment network to compete with existing ones like Visa and Mastercard. This is why toco users also have to register their wallets, where the tocos they’ve bought are then stored, via a process of verification of their identity and proof of address
Both cryptocurrency and toco make use of blockchain technology, but not in the same way. Rowett claims that toco’s use of newer blockchain technology is quicker, cheaper and much more energy efficient, and it has a significantly lower ecological impact than that of cryptocurrencies.
“The other big difference between cryptocurrency and toco,” said Rowett is that the team behind toco has designed a system that integrates with modern-day banking, which cryptocurrency doesn’t do. “The purpose of why we [toco] exist is too important to try and fight against traditional banking. ”
“Our purpose… is to provide an easier solution for climate action,” said Rowett.
What’s the price of one toco, and does it change?
One toco, at the time this article was written, costs R177,30. This price, according to Rowett, should remain more-or-less consistent in the same way that traditional currencies do. Differences over time, like international exchange rate shifts, are inherently part of any currency and could affect the price of a toco, which is controlled by The Carbon Reserve.
“The Carbon Reserve, the entity that buys the carbon, sets the price, sets the exchange rate,” said Rowett. The founders of toco and this centralised carbon credit bank will soon appoint a board of directors to run the foundation to a mandate. This mandate, according to Rowett, is to expand the voluntary carbon market in line with the IPCC (Intergovernmental Panel on Climate Change) goal of removing 25 billion tonnes of carbon from the atmosphere every year.
“The Carbon Reserve was specifically created to ensure that the price doesn’t whipsaw around… and doesn’t have massive volatility,” said Rowett. “The price is determined by the cost of the underlying asset.”
Tocos also retain their market value, meaning you won’t have to trade one toco for one cup of coffee, for example, but you will be able to buy R177,30 worth of coffee.
Why buy tocos if I can just pay with my card?
The whole point of toco is to turn our daily purchases into climate action. Toco creates a way to fight climate change by having a morning cup of coffee, going for after-work drinks, or anything else that we already spend money on, simply by paying for it with toco. “By harnessing the power of the transactional environment, you are creating a significant difference in the fight against climate change,” said Rowett.
Centraal, a local Stellenbosch bar, recently became an active toco merchant. “I haven’t picked up any issues with it yet,” said Ben Ian de Swart, a manager at Centraal who embraced the digital currency at their establishment and in his personal capacity. When asked why he uses toco, De Swart’s answer was down to earth: “Save the environment, bru. One transaction at a time. Jy weet, might as well.”
How is the Stellenbosch community responding to toco in town?
Toco is taking Stellenbosch and its surrounding communities by storm and has quickly become an alternative way to pay for some local favourites. Mood café, Plaisir wine bar, and Centraal are among some of the surprisingly many names that already accept toco as a payment option. Toco has even entered the Neelsie student centre at Stellebosch University and has become the official currency for the famous Stellenbosch Street Soirées.
“I think a lot of people are concerned about climate change, and a lot of people realise… that this problem is not going away, and that there’s not a lot of great solutions out there,” said Rowett. According to Rowett, toco allows people to “go about their daily business and have a huge impact.”
Find out what’s next for toco, or get in contact with the team on their website, via social media, or at their new office right here in town at 32 Ryneveld Street. Will you be using toco at your favourite local spots in the future? Let us know in the comments.
