Decentralized finance (DeFi) is indeed transforming the financial ecology, offering technological solutions for lending, borrowing, and trading that operate without intermediaries. However, with the rapidity of DeFi's growth comes immense risks like smart contract vulnerabilities, untypical market behavior, or scams. The objective of this study is to investigate the application of Artificial Intelligence (AI) and Blockchain technology to efficiently manage risks in DeFi platforms. Transparency, nonrepudiation, and decentralized control are the qualities guaranteed by Blockchain, and on the other hand, predictive analytics, proactive anomaly detection, and fraud prevention are the strengths of AI. The best use of these technologies in terms of risk assessment would be to design a system based on AI and blockchain - real-time risk assessment directly from the blockchain, secure data sharing assistance, and automating the risk mitigation strategies. We developed an artificial intelligence-based risk prediction model that was trained using past DeFi transaction data and we also drew up a framework that helps smart contracts provide automated responses to cybersecurity incidents. Our framework is more accurate in comparison with existing methods through simulations and case studies when it comes to risk detection and mitigation. This study proposes a reliable and resilient approach to the DeFi ecosystem that will boost further acceptance and credibility of blockchain-based financial systems.
The global financial ecosystem is undergoing a profound transformation driven by the convergence of Environmental, Social, and Governance (ESG) imperatives, Artificial Intelligence (AI) capabilities, and Financial Technology (FinTech) innovations. This paper explores the synergistic nexus among these three forces and articulates how their intersection is reframing the trajectory of sustainable finance. By integrating ESG objectives with AI-powered intelligence and FinTech-driven efficiency, the study demonstrates how financial systems can evolve from traditional, compliance-based models to adaptive, data-driven, and ethically informed architectures that promote long-term sustainability and inclusiveness. Using a multidisciplinary research framework, the paper examines the mutual reinforcement between sustainability principles, technological innovation, and digital finance mechanisms. It assesses how AI enhances ESG data management through advanced analytics, natural language processing, and machine learning algorithms that can measure, predict, and optimize sustainability outcomes. These technologies improve data transparency, reliability, and comparability, addressing one of the core challenges of ESG evaluation and reporting. In parallel, FinTech platforms like spanning blockchain, decentralized finance (DeFi), green digital bonds, and peer-to-peer investment systems-enable traceable and democratized financial flows that embed sustainability values at the transaction level.The study proposes a novel conceptual model, the “Sustainable Intelligence Framework (SIF)”, which delineates how ESG indicators, AI insights, and FinTech mechanisms interact within a dynamic feedback system. The SIF illustrates that when these domains operate synergistically, they not only enhance decision-making efficiency but also generate compounded social, environmental, and economic value. Through case studies of emerging economies and advanced markets, the research uncovers practical applications, regulatory considerations, and ethical implications of the ESG‑AI‑FinTech triad. The analysis further highlights how AI-driven FinTech can facilitate green credit scoring, impact investment assessment, and automated sustainability auditing, while blockchain ensures trust, traceability, and reduced information asymmetry across value chains. The findings affirm that the integration of ESG, AI, and FinTech is not merely convergent but transformative in creating a synergistic ecosystem that can accelerate the transition toward a sustainable, transparent, and equitable financial future. This synergy also redefines risk management and governance paradigms, positioning sustainability as a strategic driver rather than a regulatory constraint. The paper concludes by emphasizing that the ESG‑AI‑FinTech nexus represents the next frontier in sustainable finance, offering a blueprint for policymakers, institutions, and innovators to harmonize profitability with planetary and social well-being.
The acceleration of AI, FinTech, and decentralized finance (DeFi) based on AI and blockchain is transforming the international financial landscape, rewriting the rules of value, trust, and risk management. This work presents a critical, literature-informed review that integrates conceptual, experiential, econometric, simulation, and regulatory aspects of AI for financial transformation. While the literature on the topic yields consistent results, three key opportunities emerge: increased efficiency, broader financial access, and customer engagement. However, the review also highlights ongoing challenges, including regulatory uncertainty, cybersecurity risks, algorithmic bias, and the digital divide. By comparing the approaches across (as summarized in Table 1 below), the analysis finds that no single approach is adequate to capture the multi-dimensional potential of emerging technologies within finance. The conversation reflects the paradox of disruption, where innovation democratizes access while potentially, in the absence of strong governance and ethical frameworks, entrenching systemic frailties. The report suggests that the future of finance extends beyond adopting technology to also opening up avenues for institutions to be innovative while maintaining accountability, transparency, and inclusion. The limitations of the extant literature are recognized, and suggestions are provided for multi-method, cross-country, and longitudinal research to mitigate methodological fragmentation and advance knowledge on AI and finance.
Kriti Kishor, Sanjeev K. Bansal, Stefano Bresciani
Global progress toward sustainable development has made it evident that there is a need for innovative financial instruments promoting environmental goals. With the drive provided by decentralized finance technology, virtual currencies (VCs) have now emerged as potential instruments to transform traditional sources of funding. This chapter examines critically how virtual currencies can enhance green service funding by examining their potential to facilitate transparent & traceable funding for environmentally sustainable projects. The chapter attempts to identify the opportunities and challenges involved in incorporating VCs into sustainable financial frameworks. Through an intensive synthesis of theoretical insights, the chapter also provides policy recommendations and strategic interventions to bring out the maximum transformative potential of venture capitalists and contributes to the discussion on the development of resilient and sustainable financial ecosystems that enhance global environmental objectives by aligning virtual currency development with sustainability objectives.
Ahmad Zeb, Surayya Jamal, N. Irfan, Hafiz M. Sohail · 5 authors
Objective:This study investigates whether individual preferences for Environmental, Social, and Governance (ESG) principles influence portfolio decisions related to crypto assets. While ESG-focused investing is widely observed in traditional finance, less is known about how these preferences affect exposure to controversial assets such as cryptocurrencies, particularly considering their environmental concerns (e.g., energy-intensive mining processes). Methodology:The analysis uses data from the 2023 Austrian Household Finance and Consumption Survey (HFCS), which includes responses from a nationally representative sample of 2,000 individuals. The study employs descriptive statistics to profile investors, Pearson correlation analysis to examine bivariate relationships, and Ordinary Least Squares (OLS) regression to assess the effect of ESG preferences on crypto-asset investment, controlling for age, risk tolerance, and financial literacy. Results:The findings reveal a statistically significant and positive relationship between ESG preferences and crypto-asset exposure. ESG-conscious individuals are more likely to invest in cryptocurrencies than in traditional asset classes such as bonds or equities. The OLS model indicates that a one-unit increase in ESG preference score is associated with an average increase of €302 in crypto holdings, holding other variables constant. Correlation analysis supports this, with a coefficient of r = 0.28 between ESG scores and crypto exposure. Conclusion:Despite concerns over the environmental impact of certain cryptocurrencies, ESG-minded investors show notable engagement with crypto-assets—likely driven by innovation, decentralization values, or interest in ESG-aligned blockchain projects. These findings suggest a shift in how sustainable investing is understood in the digital age and underscore the need for nuanced ESG frameworks in crypto markets. The study offers valuable insights for policymakers, asset managers, and sustainability advocates aiming to guide the future of responsible digital finance.
This paper introduces a novel multi-objective optimization framework for sustainable portfolio rebalancing under uncertainty. The model simultaneously targets return maximization, downside risk control, and liquidity preservation, addressing the complex trade-offs faced by investors in volatile markets. Unlike traditional static approaches, the framework allows for dynamic asset reallocation and explicitly incorporates nonlinear transaction costs, offering a more realistic representation of trading frictions. Key financial parameters—including expected returns, volatility, and liquidity—are modeled using interval arithmetic, enabling a flexible, distribution-free depiction of uncertainty. Risk is measured through semi-absolute deviation, providing a more intuitive and robust assessment of downside exposure compared to classical variance. A core innovation lies in the behavioral modeling of investor preferences, operationalized through three strategic configurations, pessimistic, optimistic, and mixed, implemented via convex combinations of interval bounds. The framework is empirically validated using a diversified cryptocurrency portfolio consisting of Bitcoin, Ethereum, Solana, and Binance Coin, observed over a six-month period. The simulation results confirm the model’s adaptability to shifting market conditions and investor sentiment, consistently generating stable and diversified allocations. Beyond its technical rigor, the proposed framework aligns with sustainability principles by enhancing portfolio resilience, minimizing systemic concentration risks, and supporting long-term decision-making in uncertain financial environments. Its integrated design makes it particularly suitable for modern asset management contexts that require flexibility, robustness, and alignment with responsible investment practices.
This research examines the transformative dynamics shaping global finance in the coming decade. First, it investigates technological innovations such as blockchain, Central Bank Digital Currencies, AI-powered risk management, geopolitical shifts, and sustainability imperatives through an interdisciplinary approach. Second, it identifies strategic opportunities for financial inclusion, sustainable investments, and cross-border trade, drawing on historical analysis (2004–2024) and applying cutting-edge theoretical frameworks like ESG-driven resilience and Decentralized Finance Ecosystem Theory. Third, the study highlights key resilience challenges, including cybersecurity threats, inflationary pressures, and regulatory complexities, that financial systems—particularly in emerging markets—must address to ensure long-term stability. The paper applies this global perspective to the case of Vietnam, offering unique insights into how emerging markets can adapt to financial disruptions by leveraging fintech and aligning with international sustainability standards. Employing an interdisciplinary approach—encompassing historical analysis, content analysis of policy and academic documents, and secondary data on Vietnam—we underscore the critical role of policy innovation, international cooperation, and adaptive frameworks in addressing systemic risks. Based on these findings, the paper proposes policy recommendations tailored to Vietnam’s financial system while highlighting broader implications for emerging markets. It concludes by outlining future research directions that emphasize the interconnectedness of technology, sustainability, and policy in shaping a resilient and inclusive financial future, providing actionable insights for policymakers, financial institutions, and academics.
Cryptocurrencies and blockchain technology are increasingly being integrated into traditional finance, providing innovative solutions for financing environmental projects and sustainable development. Their application enables transparency, decentralization, and efficiency in financial flows, facilitating investments in green initiatives and promoting sustainable business models. Asset tokenization and smart contracts enable direct financing of renewable energy and environmental protection projects, while decentralized finance provides easier access to capital for green projects. Additionally, the shift from energy-intensive "proof-of-work" systems to more sustainable "proof-of-stake" models significantly reduces the ecological footprint of blockchain networks. Blockchain allows transparent tracking of carbon dioxide emissions and facilitates carbon credit trading, encouraging companies to adopt more responsible business practices. By using cryptocurrencies in ESG investments and green bonds, traditional finance can more effectively support sustainable projects and reduce global ecological risks. Although challenges such as regulatory barriers, market volatility, and the need for greater energy efficiency exist, the synergy between cryptocurrencies and traditional finance can accelerate the green transition, making the global economy more sustainable, resilient, and environmentally responsible.
Juan D. Saldarriaga-Loaiza, Johnatan M. Rodríguez‐Serna, Jesús M. López‐Lezama, Nicolás Muñóz-Galeano · 5 authors
The integration of non-conventional renewable energy sources (NCRES) plays a critical role in achieving sustainable and decentralized power systems. However, accurately assessing the economic feasibility of NCRES projects requires methodologies that account for policy-driven incentives and financing mechanisms. To support the shift towards NCRES, evaluating their financial viability while considering public policies and funding options is important. This study presents an improved version of the Levelized Cost of Electricity (LCOE) that includes government incentives such as tax credits, accelerated depreciation, and green bonds. We apply a flexible investment model that helps to find the most cost-effective financing strategies for different renewable technologies. To do this, we use three optimization techniques to identify solutions that lower electricity generation costs: Teaching Learning, Harmony Search, and the Shuffled Frog Leaping Algorithm. The model is tested in a case study in Colombia covering battery storage, large- and small-scale solar power, and wind energy. Results show that combining smart financing with policy support can significantly lower electricity costs, especially for technologies with high upfront investments. We also explore how changes in interest rates affect the results. This framework can help policymakers and investors design more affordable and financially sound renewable energy projects.
ABSTRACT This study contributes to the literature on sustainable development by investigating the mechanisms through which green finance fosters sustainability in emerging economies. Given the increasing importance of artificial intelligence (AI) and renewable energy in environmental transitions, we explore their roles as mediators in the relationship between green finance and sustainability. Using a dataset covering 2015–2022, we apply Baron and Kenny's (1986) mediation approach combined with advanced econometric techniques to assess green finance's direct and indirect effects on sustainable development. Our findings reveal that green finance directly enhances sustainable development while significantly promoting AI and renewable energy capacity. However, once these mediators are included, the direct effect of green finance on sustainability weakens, indicating a partial mediation effect. Moreover, the study identifies the additional mediating role of AI in linking green finance to renewable energy capacity and amplifying its overall impact. These results highlight the critical interplay between green finance, AI, and renewable energy in achieving environmental and economic sustainability. Policymakers in emerging economies should prioritize green finance initiatives, invest in AI‐driven clean energy solutions, and support decentralized renewable energy projects to accelerate sustainability transitions.
Green finance is a cornerstone of sustainable investment, but it highlights the critical importance of transparency, traceability, and financial efficiency within an environmental, social, and governance framework. This review article examines the potential of green finance as a pillar for accelerating investment in sustainable pathways, particularly using green bonds and the innovative mechanisms offered by decentralized finance (DeFi). Green bonds are highlighted as a key instrument for channeling capital toward green projects, while DeFi is explored as an innovative tool with the potential to democratize access to finance and enable micro-investments in sustainability projects with a relevant social impact. This article examines both mechanisms in terms of their ability to increase the efficiency and reliability of green finance ecosystems. The analysis also explores emerging challenges such as regulatory constraints, the threat of greenwashing, and technological limitations associated with the implementation of blockchain and artificial intelligence. By addressing these barriers, the article provides strategic recommendations for achieving greater transparency and reliability in green finance markets, thereby fostering investor confidence and broader market growth. It also identifies research gaps and proposes new avenues to advance the integration of sustainable finance, ensuring its scalability and inclusion in the promotion of global sustainability. Received: 16 November 2024| Revised: 17 February 2025 | Accepted: 27 February 2025 Conflicts of Interest The author declares that she has no conflicts of interest to this work. Data Availability Statement Data sharing is not applicable to this article as no new data were created or analyzed in this study. Author Contribution Statement Natália Teixeira: Conceptualization, Methodology, Investigation, Writing – original draft, Writing – review & editing, Visualization, Funding acquisition.
This study presents a bibliometric analysis of sustainable finance research using data exclusively from the WoS and Scopus database and visualization via VOSviewer. The aim is to map the intellectual landscape, identify thematic clusters, and explore global collaboration patterns within this rapidly evolving field. Keyword co-occurrence analysis highlights "sustainable finance" as the central theme, surrounded by related concepts such as ESG, green finance, green bonds, and sustainable development goals. Temporal and density visualizations reveal a shift in focus from traditional sustainability issues to emerging topics like greenwashing, decentralized finance, and fintech. Author and country collaboration maps uncover influential scholars and strong regional networks, particularly among institutions in the United Kingdom, India, Germany, and Italy. While the field shows high growth and thematic diversity, it also displays gaps in methodological variety, geographic inclusion, and institutional integration. The findings contribute to a comprehensive understanding of sustainable finance research trends and provide directions for future interdisciplinary inquiry.
This chapter deals comprehensively with the legal issue of a Decentralized Autonomous Organization (DAO), which is central to the theme of the book. In general, Chapters 3 –6 analyse the practical and legal applicability of certain seemingly promising business and technological solutions offered by DLT for financing capital-intensive and long-term investments, assuming a global and cross-border nature. This primarily refers to the possibility, under the law in force at the time of submitting the book for publication, of applying company law provisions to the DAO without creating a legal risk that is significant for the project to be successful (including a detailed analysis in Chapter 6 ). In this chapter, particular attention is paid to the legal issues of “wrapping” a DAO in a company.
This paper explores the transformation of traditional financial institutions under the impact of the development of decentralized finance (DeFi). It highlights how blockchain technology and DeFi are changing the way financial transactions are conducted, enabling transactions without traditional intermediaries such as banks. Key benefits, such as reduced transaction costs and increased accessibility to financial services, are discussed, while risks, including cryptocurrency volatility and smart contract vulnerabilities, are highlighted. Special attention is paid to the need for comprehensive legislation to protect market participants and maintain economic stability in the context of rapid development of decentralized finance.
How can credit guarantees evolve in a rapidly changing world? From their historical roots in mutual aid and public policy to today’s data-driven platforms, credit guarantee schemes (CGSs) have long played a quiet yet strategic role in financial systems. This volume offers a comprehensive exploration of CGSs, combining theoretical depth with operational insight. Part I retraces their institutional evolution, governance dilemmas, and design principles, focusing on the complex balance between additionality, sustainability, and control. Part II moves into the digital frontier, examining how Cloud Computing, Artificial Intelligence, Distributed Ledger Technologies, and Process Automation could reshape the delivery and monitoring of public credit guarantees. Drawing on international frameworks and forward-looking analysis, the book provides the conceptual and practical tools to understand, question, and reimagine CGSs in the face of contemporary economic, technological, and regulatory challenges. More than a technical manual, it is an invitation to rethink guarantees as dynamic instruments of modern financial architecture.
Decentralized Finance (DeFi) has become a transformative force in the financial sector, using blockchain technology to create open, permissionless financial services. Its total value locked (TVL) grew from $675 million in 2020 to $180 billion in 2021, before stabilizing at $40-50 billion in 2023. This research examines DeFi infrastructure, applications, and governance mechanisms; analyzes challenges limiting adoption; and identifies trends shaping its evolution. Through analysis of literature, reports, and market data, this study examines DeFi’s technical foundations, application scenarios, governance structures, and development challenges. Results indicate DeFi has established robust foundations supporting diverse ecosystems but faces barriers in technical (scalability, security), regulatory (compliance, legal uncertainty), and market dimensions. Future evolution may be characterized by four trends: integration with traditional finance, cross-chain interoperability, balancing privacy with regulatory compliance, and institutionalization with maturing financial engineering. These findings contribute to literature on blockchain-based financial systems and provide guidance for practitioners, regulators, and researchers.
Dr Alex Tamunomiegbam, Washima Mede, Engr Timi Akinsonji, Engr Terkuma Ivande · 6 authors
Africa’s energy industry stands at a pivotal moment, possessing plentiful renewable resources yet lacking adequate financing solutions to realize their potential. More than 600 million Africans still lack electricity access and conventional financing approaches, like government subsidies, donor funding, and bank loans, frequently fall short or are unreachable because of high risks, low investor trust, and poor regulatory conditions. Thus, innovative funding models are crucial to close the gap between energy requirements and accessible capital. This study examines crowdfunding and blended finance as effective approaches for channeling investment into renewable energy initiatives throughout Africa. Crowdfunding uses online platforms to gather minor contributions from numerous individual backers, fostering chances for decentralized, community-oriented energy solutions. Blended finance, on the other hand, strategically integrated public philanthropic, and private funding, leveraging public assets to mitigate risks and stimulate significant private sector investment. This study illustrates how analyzing case studies, such as M-KOPA Solar in Kenya and the FET FiT program in Uganda, can help overcome traditional financing obstacles, reduce risks, and activate significant investment flows for small-scale off-grid systems and large renewable projects. The research seeks to evaluate the relative efficacy of crowdfunding and blended finance in enhancing renewable energy implementation, to pinpoint their obstacles and constraints, and to suggest practical recommendations for governments, development finance organizations, and private investors. In conclusion, the results indicate that creative funding can speed up Africa’s energy transition, improve energy accessibility, and play a crucial role in reaching Sustainable Development Goal 7: affordable, reliable, sustainable, and modern energy for everyone by 2030.