Crypto-asset Market Regulation and Sustainable Development Goals

Abstract

The literature has long pointed out the energy consumption of blockchain technology, including in the context of the Sustainable Development Goals. The paper includes, with this aspect in mind, an analysis of existing and proposed crypto-asset regulations, in particular the draft MiCA regulation. This analysis was conducted to answer the research question of how current and proposed regulations on crypto-assets address the issue of energy consumption by blockchain networks. However, the analysis of these regulations should not be limited only to the impact of blockchain technology on electricity consumption and greenhouse gas emissions (Sustainable Development Goals 7 and 13) but also consider other aspects of the crypto-asset impact, i.e. its effect on the implementation of Sustainable Development Goals 8, 8.1., 8.2, 9.3, 8.10, 10.5., 10c. Therefore, it is necessary to ask the research question whether crypto-asset regulations, both in force and those proposed, take these goals into account and are conducive to their realization. The research used the dogmatic-legal method based on analysis of draft and existing legislation, and took into account the literature on the subject. The study found that the analyzed crypto-asset regulations of some European countries, Japan and a number of US states, as well as the draft MiCA regulation as of October 2022 and draft federal regulations in the US, do not address the problem of regulating the energy consumption of blockchain networks used for issuing and trading crypto-assets and thus do not directly affect the reduction of electricity consumption by these networks and thus the reduction of greenhouse gases. On the other hand, they are undoubtedly relevant to the achievement of Sustainable Development Goals 8.1., 8.2, 9.3, 8.10, 10.5., 10c. In addition, legal regulation of crypto-assets facilitates blockchain systems that enable more efficient management of energy distribution, particularly green energy, which contributes to the achievement of Sustainable Development Goals 7 and 13. It follows that despite the lack of provisions aimed directly at reducing the energy consumption of crypto-asset emissions and trading in the existing and proposed crypto-asset regulations analyzed, these regulations contribute positively to the achievement of the Sustainable Development Goals. This does not mean, however, that the idea of reducing the energy consumption of blockchain networks through legal regulation, particularly for private networks, should be abandoned – rather, such targeted regulation should be contained within energy law.