Can Fintech Development Contribute to Mitigating the Greenhouse Effect? A Global Perspective

Fintech leverages blockchain and smart contracts for decentralized economic coordination. Its emerging applications in green finance and supply chain transparency hold promise for mitigating greenhouse gas (GHG) emissions. This article evaluates the global impact of Fintech development on GHG emissions (GHGE). Based on cross-sectional regressions using data from 124 countries (2014–2018), the article finds that Fintech development significantly reduces GHGEs—with each 1% increase in the Fintech development level, GHGEs are reduced by 0.546%. This reduction is significant in low-, lower-middle-, and high-income countries, but not in upper-middle-income countries. Furthermore, the article finds that three components of Fintech activity—equity investments in Fintech companies, usage of Fintech credit, and digital payments—significantly reduce GHGEs, with digital payments proving the most effective. This article broadens our understanding of Fintech's role in achieving global climate goals, demonstrating its substantial potential for sustainable development. Subgroup analyses further validate Fintech's key function within the Environmental Kuznets Curve (EKC) framework, highlighting how EKC moderates Fintech's emission reduction effects. Overall, these findings provide valuable insights for policymakers, financial institutions, and technology entrepreneurs aiming to mitigate the greenhouse effect through enhanced Fintech development.