Abstract
Blockchains are currently recognized as a new area of digitization with difficulties in attaining sustainability. The research has not yet produced a unified framework for understanding the characteristics of blockchains that allow the development of financial trading markets over the long term. The topic of how blockchains support the growth of sustainable financial trading platforms and services still exists. A qualitative and iterative investigation was done to compile the basic concepts found in the literature to provide a conceptual framework with four sustainability themes and eleven types of affordances. The results are significant because they show how closely related these categories are, leading to conflicts between various sustainability-related concepts.
TopIntroduction
The definition of digitalization is the expansion of technology networking and connectivity to enhance individual services, communications, and transactions (Evangelista et al., 2014). Unique opportunities to enhance social and environmental well-being are presented by the rapid growth and maturation of the digital world, where an increasing number of private and public actions are being recorded, digitized, and analyzed for future technological improvement (Croo, 2015). The amount of software and data people utilize is exploding (Sivarajah et al., 2017). The productivity of local and global economies will benefit from the trend’s rapid growth, but it will also potentially lead to sustainability problems like the carbon footprint associated with rising electricity demand, cybersecurity vulnerabilities, and social inequalities caused by the widening gap in access to information and communication technologies (Irfan, 2017). The Brundtland Report, “Our Common Future,” on the other hand, defines “sustainability” as “development that satisfies the requirements of the present without compromising the ability of future generations to satisfy their own needs.”(Brinck, 1992)
Blockchain technology, a revolutionary development based on the information and computational improvements, is still expanding quickly (Bai et al., 2020). Applications for blockchain technology have grown across several industries, including financial. These rapid improvements for numerous industries present numerous opportunities, but these businesses face several social, ethical, and technological issues in addition to the implementation costs (Bai et al., 2020). The research (Noble & Patil, 2021) sheds light on the current status of blockchain in stock markets and highlights the need to address this technology’s dangers and negative societal effects. Additionally, blockchains are one of three newly developing domains of digitalization that are currently thought to be facing long-term difficulties (Linkov et al., 2018). Financial institutions struggle with sustainability, especially when one institution fails and impacts all the other network players (Al-Shaibani et al., 2020). According to Mishra & Kaushik, (2021), a sustainable financial sector is a crucial component of economic progress. Frameworks for sustainability have been developed while taking IT and digitalization into account generally. The most encouraging piece of research by Linkov et al., (2018) discusses three adaptive governance solutions that nations can use to address challenges to digital sustainability by using the Triple Bottom Line (TBL) dimensions. Ten requirements are listed in research by Stuermer et al., (2017) for ensuring sustainability in digital artifacts. The academic study on blockchain technology and its uses in various fields are gradually growing. The sustainable use of blockchain in supply chain management is a hot topic that raises various issues, advantages, difficulties, and limitations. Blockchain technology’s level of development and commercial viability have both been questioned. Business Wang et al., (2018), academics Montecchi et al., (2019), and government all have distinct perspectives on the Blockchain (Jeanbart et al., 2020). A conceptual framework that describes the sustainability of blockchains with a holistic approach while considering social, environmental, economic, and technical elements in Financial Trading Markets (hereinafter FT markets) is not yet established by the existing research.
Key Terms in this Chapter
Central Bank Coins: Digital currencies, akin to bitcoin, can be issued by a company’s central bank. They are correlated with the value of the nation’s fiat currency.
Blended Finance: This phrase describes the strategic use of development finance to raise additional funds for the long-term development of developing countries. Through blended finance, commercial money is drawn to projects supporting long-term growth while rewarding investors financially.
Tokenization: The process by which an issuer creates digital tokens representing real or virtual assets on a distributed ledger or blockchain is known as asset tokenization.
Market Capitalization: Also known as “market cap,” this term refers to the full market value of an organization. Since it represents the “market” worth of the company, it is determined using the firm’s current market price (CMP) and the total number of outstanding shares.
Hyperledger: A trustworthy set of frameworks for permission, enterprise-grade blockchain deployments is the goal of the open-source Hyperledger project. The Linux Foundation hosts this international cooperation, with participants from the financial, banking, Internet of Things, supply chains, manufacturing, and technology sectors. Among the sub-projects are Cello, Sawtooth, Composer, and Hyperledger Fabric.
Equity Financing: To raise money, a business will sell shares to investors.
Green Bonds: A green bond is a fixed-income security created primarily to collect money for environmental and climate change initiatives. These bonds typically have an asset attached to them and are supported by the financial records of the issuing company.
Stablecoin: A stablecoin is a sort of cryptocurrency that strives to maintain price stability and is backed by a reserve asset. Since they attempt to combine the greatest aspects of both worlds—the quick processing, security, and anonymity of cryptocurrency payments, as well as the stable and unchanging pricing of fiat currencies—stablecoins have grown in popularity.