Can Fintech development pave the way for a transition towards low-carbon economy: A global perspective

In the recent years, the concerns raised by environmentalists, over the excessive usage of electricity, particularly in the mining of cryptocurrencies, have caught the attention of the community at large. In this regard, regulators and stakeholders have been reevaluating the costs and benefits of technological development in general, as well as in Fintech, specifically targeting their efforts towards the restoration of the environment. Considering that technology has long been perceived as dual edged sword for the environment, this would be the appropriate time to assess its true role in the environmental improvement, or rather, even deterioration. Therefore, this study attempts to address the question of whether the Fintech development is helping economies towards a smooth transition towards a lower level of carbon and greenhouse gasses emissions. Our results in this aspect are highly encouraging, and confirm that Fintech development can in fact help to reduce the greenhouse gas emissions, after the inclusion of appropriate control variables. Moreover, these results are robust even after the incorporation of the potential endogeneity of Fintech development, by the usage of 2SLS and GMM estimations.