Regulating Blockchain-Enabled Green Finance: A Comparative Analysis of Emerging vs. Developed Markets
DOI:
https://doi.org/10.56071/jian.v9i2.1206Keywords:
Blockchain-Regulation; Emerging Markets; Green FinanceAbstract
The potential for blockchain technology to revolutionize green finance is its capacity for enhanced transparency, efficiency, and accountability for sustainable investments. However, the adoption is hindered by the heterogeneity of regulatory frameworks for various economies. This paper undertakes comparative analysis of regulations around blockchain-facilitated green finance for emerging and developed economies. It examines the main regulatory hurdles, differences in the structure of policies, and implications for the mandates for complying with blockchain-led sustainable finance activities. Based on the analysis through the lens of European Union, United States, Indonesia, Pakistan, and UAE, this study sketches best practice and hurdles for the adoption of blockchain for the adoption of green finance. Additionally, the study reflects upon the impact of the government and financial institutions towards the adoption of blockchain for the cases of ESG investments, green bonds, and the carbon market. Suggestive policies for resolving regulatory disparities and global harmonization for the adoption of blockchain for sustainable finance are given.
References
OECD. (2020). Green Finance and Investment: Scaling up Sustainable Investments. Retrieved from https://oecd.org.
Tao, H., Zhuang, S., Xue, R., Cao, W., Tian, J., & Shan, Y. (2022). Environmental finance: An interdisciplinary review. Technological Forecasting and Social Change, 179, 121639. https://doi.org/10.1016/j.techfore.2022.121639
Rani, P., Sharma, P., & Gupta, I. (2024). Toward a greener future: A survey on sustainable blockchain applications and impact. Journal of Environmental Management, 354, 120273. https://doi.org/10.1016/j.jenvman.2024.120273
Cai, T., & Hong, Z. (2024). Exploring the structure of the digital economy through blockchain technology and mitigating adverse environmental effects with the aid of artificial neural networks. Frontiers in Environmental Science, 12, 1315812. https://doi.org/10.3389/fenvs.2024.1315812
European Commission. (2021). The European Green Deal and Sustainable Finance Disclosure Regulation. Retrieved from https://ec.europa.eu.
SEC. (2022). SEC Approach to Blockchain and Digital Asset Regulation. Retrieved from https://sec.gov.
Irfan, M., Kadry, S., Sharif, M., & Khan, H. U. (Eds.). (2023). Fintech Applications in Islamic Finance: AI, Machine Learning, and Blockchain Techniques: AI, Machine Learning, and Blockchain Techniques. IGI Global.
World Bank. (2022). The Role of Regulation in Blockchain-Based Green Finance. Retrieved from https://worldbank.org.
Mishra, Mukesh Kumar (2024): Accelerating green finance for a sustainable future, ResearchGate, Berlin, https://doi.org/10.13140/RG.2.2.32497.70248
World Economic Forum. (2024, November 22). What are green bonds and how can they help the climate? World Economic Forum.
https://www.weforum.org/stories/2024/11/what-are-green-bonds-climate-change/
Ojukwu, P. U., Cadet, E., Osundare, O. S., Fakeyede, O. G., Ige, A. B., & Uzoka, A. (2024). Advancing green bonds through FinTech innovations: A conceptual insight into opportunities and challenges. International Journal of Engineering Research and Development, 20, 565-576.
Sirisha, G. L., Sukumar, S., Iyer, A., & Nakitende, M. G. (2024). Environmental, Social, and Governance (ESG) Investing: Evolution, Significance, Challenges, and Impacts. In Modern Concepts and Practices of Climate Finance (pp. 45-66). IGI Global.
DOI:10.4018/979-8-3693-2117-1.ch002
Fraser Institute. (n.d.). The impracticality of standardizing ESG reporting. Fraser Institute. https://www.fraserinstitute.org/sites/default/files/ESG-myths-realities-impracticality-of-standardizing-ESG-reporting.pdf
Tabur, M., & Bildik, R. (2025). The impact of ESG rating disagreement on the financial performance of environmentally sensitive industry companies worldwide. Borsa Istanbul Review. https://doi.org/10.1016/j.bir.2025.01.013
Verma, M. (2023). Navigating the World of Carbon Credits: Strategies for Emissions Reduction and Market Participation. Int. J. Trend Sci. Res. Dev, 7, 259-264.
Kreibich, N. (2024). Toward global net zero: the voluntary carbon market on its quest to find its place in the post‐Paris climate regime. Wiley Interdisciplinary Reviews: Climate Change, 15(5), e892. https://doi.org/10.1002/wcc.892
Boumaiza, A., & Maher, K. (2024). Leveraging blockchain technology to enhance transparency and efficiency in carbon trading markets. International Journal of Electrical Power & Energy Systems, 162, 110225. https://doi.org/10.1016/j.ijepes.2024.110225
Rahman, S. U., Awan, R. U., & Azam, M. (2024). Green Finance: Tackling Sustainability Challenges in Today’s Economy. In The Palgrave Handbook of Green Finance for Sustainable Development (pp. 779-810). Cham: Springer International Publishing. https://doi.org/10.1007/978-3-031-65756-6_29
Peng, S., Tan, Z. S., & Zhou, S. (2024). Greenwashing on the Regulatory Agenda: How Regulators Make Greenwashing Governable. Available at SSRN 4733765. https://ssrn.com/abstract=4733765
Financing for Sustainable Development Office. (2024, March 1). 2024 financing for sustainable development report. United Nations.
Laroiya, C., Saxena, D., & Komalavalli, C. (2020). Applications of blockchain technology. In Handbook of research on blockchain technology (pp. 213-243). Academic press. https://doi.org/10.1016/B978-0-12-819816-2.00009
Tarhini, M. (2021). Application of asset tokenization, smart contracts and decentralized finance in agriculture. Revista de Studii Financiare, 6(10), 152-163. https://www.ceeol.com/search/article-detail?id=1045924
Bakare, F. A., Omojola, J., & Iwuh, A. C. (2024). Blockchain and decentralized finance (DEFI): Disrupting traditional banking and financial systems. World J. Adv. Res. Rev, 23(3), 3075-3089. https://doi.org/10.30574/wjarr.2024.23.3.2968
Patwardhan, I., Mane, S., & Patel, N. (2024). Technical Insights on Blockchain's Role in Financial Systems. arXiv preprint arXiv:2412.12131.
https://doi.org/10.48550/arXiv.2412.12131
Udeh, E. O., Amajuoyi, P., Adeusi, K. B., & Scott, A. O. (2024). The role of Blockchain technology in enhancing transparency and trust in green finance markets. Finance & Accounting Research Journal, 6(6), 825-850.
https://doi.org/10.51594/farj.v6i6.1181
Maleki, H. (2023). Leveraging Blockchain Technology in Green Finance. urn:nbn:se:kth:diva-329081
Sunyaev, A., Kannengießer, N., Beck, R., Treiblmaier, H., Lacity, M., Kranz, J., ... & Luckow, A. (2021). Token economy. Business & Information Systems Engineering, 63(4), 457-478. https://doi.org/10.1007/s12599-021-00684-1
Almadadha, R. (2024). Blockchain technology in financial accounting: enhancing transparency, security, and esg reporting. Blockchains, 2(3), 312-333. https://doi.org/10.3390/blockchains2030015
Marengo, A., & Pagano, A. (2023). Investigating the factors influencing the adoption of blockchain technology across different countries and industries: a systematic literature review. Electronics, 12(14), 3006. https://doi.org/10.3390/electronics12143006
Ariyibi, K. O., Bello, O. F., Adediran, O. F., & Paul, A. (2024). The application of blockchain technology to improve tax compliance and ensure transparency in global transactions. https://doi.org/10.30574/ijsra.2024.13.2.2286
Javaid, M., Haleem, A., Singh, R. P., Suman, R., & Khan, S. (2022). A review of Blockchain Technology applications for financial services. BenchCouncil Transactions on Benchmarks, Standards and Evaluations, 2(3), 100073.
https://doi.org/10.1016/j.tbench.2022.100073
Zhang, X., Aranguiz, M., Xu, D., Zhang, X., & Xu, X. (2018). Utilizing blockchain for better enforcement of green finance law and regulations. In Transforming climate finance and green investment with blockchains (pp. 289-301). Academic Press. https://doi.org/10.1016/B978-0-12-814447-3.00021-5
Prewett, K. W., Prescott, G. L., & Phillips, K. (2020). Blockchain adoption is inevitable—Barriers and risks remain. Journal of Corporate accounting & finance, 31(2), 21-28.
https://doi.org/10.1002/jcaf.22415
Sadiq, M. N., Ahmad, A., Baig, U., & Raza, M. (2023). Islamic Fintech Ecosystem Development in Pakistan: A Meta Analysis. Journal of Asian Development Studies, 12(4), 832-857. https://doi.org/10.62345/
Bhattacharya, S., & Sachdev, B. K. (2024). Regulatory Challenges and Opportunities for Future Fintech and Green Finance. Blockchain’s Transformative Potential of Financial Technology for Sustainable Futures, 103-122. https://doi.org/10.1007/978-3-031-70219-8_7
Levitt, H. M., Bamberg, M., Creswell, J. W., Frost, D. M., Josselson, R., & Suárez-Orozco, C. (2018). Journal article reporting standards for qualitative primary, qualitative meta-analytic, and mixed methods research in psychology: The APA Publications and Communications Board task force report. American Psychologist, 73(1), 26. https://doi.org/10.1037/amp0000151
OECD (2021), OECD Economic Outlook, Volume 2021 Issue 1, OECD Publishing, Paris, https://doi.org/10.1787/edfbca02-en.
Kahpi, H. S., Wulandari, S. S., Atichasari, A. S., & Marfu, A. (2024). Analysis of the relationship between innovative leadership and market orientation on the sustainability of technopreneurship: the mediating role of external regulatory compliance: an empirical evidence in Indonesia. Environment, Development and Sustainability, 1-42. https://doi.org/10.1007/s10668-024-05072-9
Máchová, R., & Lnenicka, M. (2017). Evaluating the quality of open data portals on the national level. Journal of theoretical and applied electronic commerce research, 12(1), 21-41. http://dx.doi.org/10.4067/S0718-18762017000100003
Downloads
Published
How to Cite
Issue
Section
License
Authors who publish in this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Attribution-ShareAlike 4.0 International (CC BY-SA 4.0) License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
JIAN is licensed under a under a Attribution-ShareAlike 4.0 International (CC BY-SA 4.0) License
