Can crypto be green? Evaluating the environmental and financial impact of the digital assets economy

Joel Sepúlveda; Amanda Lemette; Karla Ohler-Martins

doi:10.29073/jer.v3i1.44

Authors

Joel Sepúlveda Innovalia Association
Amanda Lemette Pontifical Catholic University of Rio de Janeiro https://orcid.org/0000-0001-7602-8980
Karla Ohler-Martins Ruhr West University of Applied Sciences https://orcid.org/0000-0001-5764-9415

DOI:

https://doi.org/10.29073/jer.v3i1.44

Keywords:

Carbon Emissions, Cryptocurrencies, Decentralized Finance (DeFi), Proof-of-Stake (PoS), Sustainability

Abstract

The rise of cryptocurrencies and decentralised finance (DeFi) has fuelled a fast-growing digital assets economy with major environmental and financial implications. Proof-of-work (PoW) systems like Bitcoin demand high energy and emit large volumes of CO₂, while proof-of-stake (PoS) alternatives such as Ethereum and Cardano significantly reduce environmental costs. This paper analyses seven major crypto projects: Ethereum, Uniswap, Aave, Maker, Cardano, XRP, and Stellar. It focuses on their energy consumption, financial performance, and sustainability. The study proposes a novel sustainability scoring framework to support ESG-aligned investment and regulatory design. While PoW offers unmatched security, its environmental toll is unsustainable. PoS models show promise but face governance and scalability concerns. The study highlights the urgent need for sustainable innovation and regulatory differentiation to align crypto markets with climate goals, investor expectations, and long-term economic viability.

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