Opportunities to improve environmental sustainability and integrate environmental standards to reduce the environmental impact of cryptocurrency industry development

Abstract

The cryptocurrency industry creates a significant environmental burden, consuming 0.61-0.78% of global electricity and generating 0.28% of global carbon dioxide emissions. The purpose of the study was to identify opportunities to increase environmental sustainability and integrate environmental standards to reduce the burden on the environment from the development of the crypto industry. The study used a qualitative methodological approach combining a systematic comparative analysis of regulatory documents of eight jurisdictions for the period of 2022- 2025 and semi-structured expert interviews. The jurisdictions were classified according to the degree of regulation: strict (EU, Switzerland), moderate (USA, Great Britain, Japan), liberal (Singapore, UAE), and prohibitive (China). The results demonstrated substantial heterogeneity in regulatory approaches with different environmental impacts. Information and fiscal mechanisms have the greatest potential to achieve environmental sustainability while minimizing unintended consequences. Prohibitive approaches create mixed consequences for the environment, increasing global emissions by 15-20% due to the migration of mining to regions with more carbon-intensive energy. The study demonstrates the need for international coordination of regulatory efforts and a shift from prohibitive to transformative strategies. The proposed three-level strategy for the integration of environmental standards (mandatory reporting, economic incentives through differentiated taxation, and progressive mandatory standards) shows the potential to reduce the environmental burden from the development of the crypto industry.