Can Cryptocurrencies Be Green? The Role of Stablecoins Toward a Carbon Footprint and Sustainable Ecosystem

Abstract

(1) Background: Cryptocurrencies have a substantial environmental impact. In particular, the mining procedure that is employed to produce and finalize the transaction is energy-intensive and generates carbon emissions. Consequently, the objective of the present investigation is to investigate the function of cryptocurrencies in a sustainable development. This research specifically investigates the function of stablecoins, a novel subject in finance and academia that has the potential to foster a sustainable business environment. (2) Methods: A bibliometric analysis was performed using the R statistical programming language together with the bibliometric tools Biblioshiny and VOSviewer to fulfill the research objective. Data were obtained from the Scopus database, and their selection was completed using the PRISMA methodology. (3) Results: The results of the current research highlight the crucial role of stablecoins in promoting an alternative decentralized financial sector, offering a unique opportunity for the market to create a more inclusive and environmentally friendly financial ecosystem. Moreover, research indicates that stablecoins might convert Ethereum into a stable currency and enhance their ecologically friendly path. (4) Conclusions: Stablecoins have become a crucial tool in the unpredictable bitcoin environment, offering stability in a tumultuous market. The research indicates that users need to acknowledge the sustainability of asset collateral, and so far, only the regulation of stablecoins is progressing in this area.

1. Introduction

The environmental impact of cryptocurrencies has been the subject of investigation, particularly as traditional investments increasingly incorporate sustainable environmental, social, and governance (ESG) criteria. What is the anticipated timeline for the environmental sustainability certification of cryptocurrency? Green investments are financial assets, such as bonds, that support activities that produce positive environmental and social outcomes. The development of sustainable transportation infrastructure, the expansion of renewable energy sources, and the reduction in greenhouse gas emissions are all promoted by green bonds [1]. Alternatively, a significant amount of energy is consumed by cryptocurrency mining, which is why many individuals perceive cryptocurrency investments as ecologically detrimental. In the context of cryptocurrencies, the practice of mining is known as “proof of work” (POW). To guarantee transaction security and generate new currencies, cryptocurrency “miners” employ specialized computers to solve complex mathematical equations. This represents the threshold at which energy consumption becomes substantial [2,3,4].

The industry has acknowledged the need to alter methods and practices to enhance sustainability. The Crypto Climate Accord (CCA) was established by many stakeholders in the cryptocurrency sector in 2021, aiming to decarbonize the global crypto economy by 2040 via the introduction of green coins. Green cryptocurrencies, or green crypto, are defined as those that maintain blockchain integrity while being energy-efficient and reducing carbon emissions. Sustainability is progressively emerging as a critical factor for the future of the blockchain sector. Stablecoins may be classified as a kind of green cryptocurrency. Stablecoins have emerged as a significant tool to alleviate the intrinsic volatility of cryptocurrency markets by offering a stable and dependable medium for value preservation and transfer. Stablecoins have several advantages, including improved financial inclusion and streamlined cross-border transactions, which are particularly advantageous for sustainability and carbon emissions. Nonetheless, there is increasing concern about their environmental impacts. Consequently, new regulations for stablecoins will facilitate the creation and governance of digital currencies designed to maintain their value over time. These currencies may be associated with conventional assets such as fiat currency or commodities [5,6,7,8,9,10,11]. This method employs blockchain technology to ensure the security, transparency, and efficacy of transactions. Stablecoins are developed by developers to mitigate the volatility that is frequently associated with cryptocurrencies like Bitcoin or Ethereum. This renders them more suitable for secure value storage, smart contracts, and standard transactions [12].

The development of stablecoins is contingent upon the selection of an appropriate underlying asset for pegging, the establishment of a robust consensus mechanism (such as algorithmic stability or Proof of Stake), and the implementation of protocols for minting, burning, and governance. Additionally, it is imperative to establish user confidence and adhere to regulatory requirements. The advancement of stablecoins is crucial to the blockchain and cryptocurrency ecosystem, as it facilitates the seamless integration and incorporation of conventional financial institutions, while also addressing the stability issues that have hindered their wider acceptability [13,14].

However, stablecoin is still in its infancy in the cryptocurrency sector, and there is a scarcity of research on its potential to mitigate energy price volatility and its impact on green financing. Consequently, the objective of the investigation is to offer a thorough examination of its role in the development of a sustainable business environment. Utilizing the R statistical programming language, the study’s research objective was accomplished through the utilization of the bibliometric analysis tools Biblioshiny version 4.3.0 and VOSviewer version 1.6.20. The inquiry’s outcome was the selection of 179 research papers from the Scopus database using the PRISMA approach.

The study is structured as follows: Section 2 provides the literature review, Section 3 specifies the materials and methods, Section 4 displays the results, Section 5 interprets the results, and Section 6 finishes the article by summarizing the findings and discussing their implications.

2. Literature Review

As the Bitcoin industry grows, the discussion around its environmental consequences intensifies. Critics sometimes condemn Bitcoin, Ethereum, and other prominent cryptocurrencies for their substantial energy consumption, mostly due to their reliance on Proof of Work (PoW) consensus techniques. In a society increasingly dedicated to advancing renewable energy and minimizing carbon footprints, apprehensions over their long-term viability have emerged [15]. Conversely, stablecoins like INRx, India’s stablecoin, provide an eco-friendlier approach. What are the specific environmental effects of stablecoins in contrast to conventional cryptocurrencies?

In conventional cryptocurrencies like Bitcoin, miners must resolve complex mathematical equations to authenticate transactions and incorporate them into the network. This method is both computationally demanding and necessitates significant energy usage. The yearly energy use of Bitcoin is comparable to that of whole nations, such as Norway and Argentina, according to the Cambridge Bitcoin Electricity Use Index. The substantial reliance on non-renewable energy sources intensifies the environmental effect. The carbon footprint of traditional cryptocurrencies has been a major point of criticism, diminishing their viability in an ecologically aware society [16,17].

Conversely, stablecoins function as an alternative cryptocurrency, characterized by their environmentally sustainable attributes. Stablecoins are distinguished by their distinctive design. The predominant stablecoins, including INRx, function on blockchain networks using energy-efficient consensus processes, such as delegated Proof of Stake (dPoS) or Proof of Stake (PoS). Rather than requiring miners to do energy-intensive computations, these models rely on validators selected according to the quantity of tokens they own or have delegated. This substantially reduces the energy required for transaction verification. Moreover, stablecoins are often linked to a physical object, such as fiat cash. This stability facilitates the rapid and efficient execution of transactions, hence reducing the occurrence of superfluous transactions often seen in extremely volatile conventional cryptocurrency exchanges [18].

Several green stablecoin research initiatives are now investigating algorithmic stability techniques to sustain price stability without collateral, therefore reducing environmental effect. These activities involve sponsoring carbon offset programs and establishing partnerships with environmentally concerned groups, in addition to promoting technology. This facilitates the allocation of a segment of stablecoin reserves or transaction fees to environmental programs, effectively mitigating emissions. Additionally, some green stablecoin efforts are investigating the incorporation of renewable energy certificates or the use of blockchain technology to track and verify sustainable practices within supply chains. The integration of these themes shows a dedication to creating a sustainable future for stablecoins, with environmental responsibility as the cornerstone of development efforts. These efforts are facilitating the widespread adoption of sustainable practices throughout the industry by setting a new benchmark for responsible innovation within the bitcoin ecosystem [18].

Stablecoins encounter numerous obstacles, despite their pervasive adoption. Stablecoin issuers and consumers are confronted with a complex environment because of regulatory ambiguity that is inconsistent across a multitude of countries worldwide. Technological infrastructure is a substantial impediment, particularly in impoverished countries with restricted access to technology. It is imperative to maintain trust and promote the comprehension of stablecoins by leveraging the security and scalability of blockchain technology. The concept of digital currencies remains unfamiliar and complex for many individuals, necessitating instructional initiatives to elucidate the benefits and risks of stablecoins. It is essential that technology suppliers, financial regulators, and international monetary institutions collaborate to address these challenges to guarantee the future of stablecoins. By significantly enhancing scalability, security, and sustainability, blockchain technology advancements will drive a more widespread adoption of technology. Institutional investment frequently introduces pragmatic solutions to the market, a critical step in fostering public acceptance. Organizations will experience an increase in public engagement when they provide a solution that is both comprehensible and user-friendly, thereby enhancing the daily lives of both businesses and individuals. These organizations must ascertain whether they will offer new stablecoin solutions such as standalone stablecoins or as part of a user-friendly UI that is directly connected to traditional banking. In the final analysis, financial inclusion is one of the most compelling advantages of stablecoins. They may facilitate the participation of a greater number of individuals in the formal economy by offering secure and efficient methods of conducting transactions. This would contribute to economic development and poverty reduction. However, it is imperative to surmount the obstacles posed by technical, legislative, and trust-related concerns to achieve this inclusion.

However, research is yet insufficient about the function of sustainable stablecoins and the stability or volatility of the cryptocurrency market, their designs and safe-haven characteristics, as well as the relationships between stablecoins and other cryptocurrency assets and marketplaces, especially Bitcoin. Thus, the current work employs bibliometric analysis to tackle the issues, as detailed in the subsequent section.

3. Materials and Methods

The objective of this research was to identify prevalent themes, shortcomings, and nascent areas of inquiry by conducting a comprehensive evaluation of publications using a bibliometric methodology. The bibliometric analysis technique facilitates the evaluation of the current research environment and the identification of prestigious academic journals, publishing organizations, or authors within a specific subject matter. Furthermore, bibliometric analysis is a valuable instrument for the examination of a variety of statistical aspects of research publications and their citation analysis. Additionally, bibliometric analysis is widely acknowledged as a reliable and frequently employed method for the examination and investigation of vast quantities of scientific data. The development of study domains is influenced by the evolutionary intricacies of discipline. Bibliometric analysis has been employed by academics for a variety of purposes, such as the examination of published data, the identification of emergent research trends, and the comprehension of cooperation patterns. This bibliometric analysis is advantageous for comprehending the academic landscape by clarifying the role of sustainable stablecoins, their impact on the stability or volatility of the cryptocurrency market, their designs and safe-haven characteristics, and the relationships between stablecoins and other cryptocurrency assets and markets, particularly Bitcoin [19,20].

However, we used a six-step process (Figure 1) to apply bibliometric analysis.

3.1. Data Collection

Data were acquired from Scopus spanning 2018 to 2024 and utilized in the current analysis. Founded in 2004, Scopus is a prominent bibliographic database. The compilation comprises abstracts and citations obtained from prominent scientific websites and journals. The database comprises 36,377 titles from 11,678 publishers. This study gathers data on four essential concepts: stability, volatility, cryptocurrencies, and stablecoins. The process for performing a keyword search is detailed more thoroughly in

Table 1. Keyword search formula. Source: Own elaboration.

Step	Keyword Search
1	((“cryptocurrencies” AND “sustainability”))
2	((“cryptocurrencies” OR “stablecoins”) AND “sustainability”))
3	((“cryptocurrencies” OR “stablecoins” OR “bitcoin”) AND “sustainability”))
4	((“cryptocurrencies” OR “stablecoins” OR “bitcoin”) AND (“sustainability” OR “sustainable development”))
5	((“cryptocurrencies” OR “stablecoins” OR “bitcoin”) AND (“sustainability” OR “sustainable development”) AND (“volatility”))
6	((“cryptocurrencies” OR “stablecoins” OR “bitcoin”) AND (“sustainability” OR “sustainable development”) AND (“volatility” OR “volatility risk”))
7	((“cryptocurrencies” OR “stablecoins” OR “bitcoin”) AND (“sustainability” OR “sustainable development” OR “circular economy” OR “green crypto”) AND (“volatility” OR “volatility risk”))
8	((“cryptocurrencies” OR “stablecoins” OR “bitcoin”) AND (“sustainability” OR “sustainable development” OR “circular economy” OR “green crypto”) AND (“volatility” OR “volatility risk”) AND (“safe haven”))
9	((“cryptocurrencies” OR “green crypto” OR “stablecoins” OR “bitcoin”) AND (“sustainability” OR “sustainable development” OR “circular economy” OR “green crypto”) AND (“volatility” OR “volatility risk”) AND (“safe haven”))
10	((“cryptocurrencies” OR “green crypto” OR “stablecoins” OR “bitcoin”) AND (“sustainability” OR “sustainable development” OR “circular economy” OR “green crypto”) AND (“volatility” OR “volatility risk”) AND (“safe haven”)) AND (LIMIT-TO (DOCTYPE, “ar”)) AND (LIMIT-TO (PUBSTAGE, “final”) OR LIMIT-TO (PUBSTAGE, “aip”)) AND (LIMIT-TO (SRCTYPE, “j”))

[12].

3.2. Bibliometric Analysis and Visualization

This study used the R package tool, a powerful set of tools for public data analysis. For science mapping, the open-source bibliometrix application analyzes the scientific literature exhaustively. This tool helps scholars do quantitative bibliometric and scientometric analysis. R-language-based RStudio version 3.6.0+ imports Scopus bibliographic data. Several scientific fields have studied the R programming language and related libraries. The CRAN network preserves and distributes “R.” This research used the Bibliometrix suite’s Biblioshiny web application for bibliometric analysis. The user-friendly design, described in the website’s instructions, caused this [21]. This study’s authors installed and activated Bibliometrix R using R Studio. They created a CSV file using Scopus bibliographic data. Researchers started Biblioshiny by running Biblioshiny() in R. The online application Biblioshiny lets non-programmers use the R utility Bibliometrix. Bibliometrix tools provide academics with a wide range of bibliometric data. The Biblioshiny statistical tool aids bibliometrics in data mining. This study compares keyword frequency in two scientific contexts. The Biblioshiny interface contains “A.csv.” We acquired PNG and Excel (.csv) files.

Authors, publications, and institutions must also be examined to assess a subject’s research performance. VOSviewer and performance-related indicators enable bibliographic coupling visualization. After providing data for analysis, we focus on scientific mapping and performance assessment, two essential components of bibliometric analysis. For a complete bibliometric assessment, this study uses all three methods. This study uses the Biblioshiny network analysis tool and performance analysis metrics to visualize academics’ stablecoin research themes and theme maps and their impact on cryptocurrency industry sustainability. Researchers use scientific mapping, network analysis, and performance analysis methods to evaluate the study and improve visualization. All, especially academics, may use the software tools used in this study. These methods help identify prevailing patterns and weaknesses in published literature and databases. Mendeley and VOSviewer can help publication clustering even for those without advanced computer abilities or clustering knowledge, which is one of their biggest advantages. For data analysis and visual representation, sources, authors, and documents must be evaluated hierarchically [22].

3.3. The PRISMA Method

Figure 2 presents the PRISMA flow diagram, illustrating the fundamental methodologies employed in the systematic selection of publications for bibliometric analysis. The search query revealed a total of 695 sources in the collection. We restricted the selection to articles only, decreasing the total number to 344. We performed a comprehensive analysis of 237 research studies, excluding those that were overly generic or lacked a definitive correlation, since they were inappropriate for our present inquiry. The fundamental objective of this study is to emphasize the significance of resilient stablecoins in affecting the stability or volatility of the cryptocurrency market. The study will analyze the qualities of stablecoins, encompassing their design, safe-haven properties, and their correlations with other cryptocurrency assets and marketplaces, especially Bitcoin. After a comprehensive examination of the papers, we identified that the titles or keywords of certain chosen sources insufficiently represent the characteristics and subtleties of the problem being studied. We optimized the search parameters to exclude extraneous references and to incorporate only articles pertinent to the current investigation. A total of 197 academic papers were found and included in the bibliometric analysis as a result of this filtering approach.

Further inclusion and exclusion criteria used in the PRISMA approach, which assist in the source selection process, were as follows: (i) the date of publication; (ii) the link of stablecoins and sustainability; (iii) the language of publication (only English-language research studies are included); and (iv) geographic factors, encompassing specific regions, states, countries, or populations. Subsequently, each of these publications was included into the bibliometric study.

4. Results

4.1. Network Analysis

Figure 3 illustrates the annual production of research publications concerning the role of sustainable stablecoins and their impact on the stability or volatility of the cryptocurrency market, their designs and safe-haven attributes, as well as the interrelations between stablecoins and other cryptocurrency assets and markets, particularly Bitcoin. Considering the yearly study output in the sector, it is evident that cryptocurrencies are integrated into the broader discourse on sustainability, particularly during the years 2022–2024. The cryptocurrency environment is continually changing due to external events, with the market adapting to investors’ anticipations. There are significant and relevant inquiries about the future of cryptocurrencies in relation to climate change and rising energy costs. From this perspective, the development of stablecoins is set for a significant transition towards sustainability. Future advancements in stablecoin technology will likely prioritize ecological practices due to increasing scrutiny of blockchain’s environmental impact. A notable method involves the broad use of energy-efficient consensus mechanisms, such as Proof of Stake (PoS) and other environmentally advantageous alternatives. These solutions significantly reduce energy consumption, and therefore, reduce the carbon footprint associated with stablecoin ecosystems. Furthermore, developments in algorithmic stability models suggest the capacity to achieve price stability without necessitating substantial collateral, thereby further reducing environmental impact.

Figure 4 illustrates the journals with the highest numbers of research submissions pertaining to the study topic from 2018 to 2024. Finance Research Letters (four publications), Lecture Notes in Computer Science (four publications), and Lecture Notes in Networks and Systems (four publications) are the most relevant sources. Among the three journals, Finance Research Letters is the only publication that welcomes articles from all domains of finance, including cryptocurrencies and their impact on the green financial system. Conversely, the other two publications focus on computer science, a discipline closely associated with cryptocurrency. Cryptocurrencies operate on a decentralized public database, known as a blockchain, which records all transactions and is updated and maintained by the holders of the currency. Cryptocurrency units are produced by mining, a process that utilizes computational power to solve complex mathematical equations. In addition to the previously presented journals, Digital Finance ranks second among the most relevant sources in the subject. In the last two years, it has published articles on blockchain, cryptocurrencies, fintech, and digital banking. Financial Stability studies examine the impact of cryptocurrencies on the sustainable growth of the cryptocurrency industry. Nevertheless, hardly any of the aforementioned periodicals have disseminated research articles examining the role of stablecoins in the sustainable growth of the financial sector. Consequently, the present research will address the existing gap in the literature concerning this issue and will assist both researchers and experts in comprehending the significance of stablecoins as a pivotal factor for the future of the blockchain industry and its sustainability [23].

On the other hand, Figure 5 illustrates the authors who have had the greatest influence on the field under investigation. Hisahi H. is the first-ranked individual on the list, and most of their research is centered on the potential of blockchain technology to assist the financial sector in addressing big data through a more sustainable and environmentally friendly process. Hisahi’s research, “Banking with Blockchain-ed Big Data,” is intended to resolve the research and development void in banking for blockchain-ed big data from an academic perspective. The adoption and advancement of blockchain technology in the banking sector are anticipated to be adversely affected by this divide. To encourage further active engagement from academics, researchers, and bankers, we have developed the most comprehensive evaluation of the influence of blockchain on banking to date. This evaluation emphasizes the opportunities and challenges from a banking perspective. In addition, we examine the future of financial data analytics in the context of blockchain-derived big data and emphasize the growing significance of signal extraction and filtering in the banking sector. There is a compelling need for exhaustive research and development in various aspects of banking with blockchain to address the challenges that are presently impeding its global proliferation, even though some institutions are implementing blockchain technology in small groups or in isolation.

4.2. Bibliometric Analysis

Figure 6 depicts a Sankey diagram that connects authors, countries, and keywords. This mapping type provides the first basis for the establishment of research organizations. The results may also aid policymakers in identifying areas for further research on this subject. From the market’s perspective, Figure 6 highlights the need to establish a decentralized financial market, which might promote its sustained viability. Stablecoins have been a significant topic of research in the global academic community due to its capacity to provide a sustainable and stable financial system. This accomplishment may be facilitated by the collaboration of stablecoins and smart contracts. The roles of stablecoins and smart contracts are evolving swiftly, mirroring advancements in the cryptocurrency sector. Stablecoins are a unique kind of digital currency engineered to maintain a consistent value and reduce the volatility associated with other cryptocurrencies. The automatic adjustments to supply and demand facilitated by smart contracts are essential for currency stability, since they ensure price uniformity. The Sankey diagram emphasizes the need to analyze the advantages that the interplay between stablecoins and smart contracts will provide to the market. This may result in an examination of the significance of security and the demonstration of ideal methodologies for secure implementation, supplemented by a case study to illustrate the reality [24,25,26].

Moreover, the robust synergy between stablecoins and smart contracts provides a plethora of advantages to investors and enterprises. Virtual agreements that are implemented autonomously upon the fulfillment of specific criteria are known as smart contracts, and they are the most effective method of enforcing contractual obligations between parties. Smart contracts may enhance the stability of stablecoins by managing supply and demand, restricting their use, and initiating asset transactions. The utilization of smart contracts for stablecoins offers a variety of benefits, including security, efficiency, and transparency. The removal of intermediaries facilitates the execution of transactions in a more secure and efficient manner, without the risk of fraud or exploitation. Furthermore, the capacity to modify smart contracts facilitates the administration of stablecoin distribution in accordance with market fluctuations. This guarantees that stablecoins remain stable during periods of economic volatility, thereby enhancing their consistency and reliability as an asset class [2,7].

Figure 7 illustrates the principal challenges in the domain from 2018 to 2024, accompanied by a bibliometric study. The subject trends map is notable for its capacity to depict both contemporary and historical issues, providing a comprehensive overview of the topic’s development throughout time, organized by year. The identification of topics corresponds with the number of words detected in bibliometric analysis. Figure 6 illustrates the evolution of stablecoins and their function as a digital safe haven for cryptocurrencies, as previously mentioned. The cryptocurrency markets have seen increased confidence with the introduction of many new stablecoins. This can lead to a decrease in the risk management sector and an increase in trading volume and activity. Stablecoins augment market value by their transactional efficiency and stability, albeit offering small incentives. Traders use stablecoins as a protective measure against market declines, offering a secure refuge for their digital assets until market circumstances stabilize. Stablecoins are used worldwide, since they provide a more efficient and cost-effective method for bill payments, enabling users to leverage blockchain technology without concerns over short-term price fluctuation [27,28,29].

Additionally, bibliometrics employs a thematic map (Figure 8) to determine the conceptual framework of the subject matter. The purpose of a thematic map is to enhance one’s comprehension of the field’s present status and its potential for future sustainability. This analysis is advantageous in that it provides researchers and stakeholders with information regarding the potential for future research development in thematic areas within a single field. Thematic analysis is a technique that involves the examination of the interconnections between clusters of authors’ keywords to develop themes. The distinguishing characteristics of these motifs are their density and centrality. Density is represented by the vertical axis, while centrality is represented by the horizontal axis. Centrality quantifies the degree of correlation between various topics, whereas density quantifies the cohesiveness of the nodes. The significance and profundity of specific topics are determined by these two properties. The centrality and significance of a node increase as the number of relations it has with other nodes in the thematic network increases, and it occupies the essential position within the network. Similarly, the cohesiveness of a node, which is a measure of the density of a research field, determines its ability to persist and grow.

Figure 8 illustrates the thematic map depicting the role of stablecoins in the sustainability of the cryptocurrency and financial markets. The map is fundamentally segmented into four quadrants (Q1 to Q4). The principal themes are shown in the upper right quadrant (Q1), and the foundational themes are in the bottom right quadrant (Q4). The highly specialized themes are in the upper left quadrant (Q2), while the emerging or declining themes are situated in the lower left quadrant (Q3). The notion of “stablecoins” is positioned between Q1 and Q2, indicating that it is an underdeveloped theme yet possesses the potential to shape the research domain concerning the role of stablecoins in the sustainable advancement of the cryptocurrency market and their contribution to green finance. This is very apparent in the figure. Stablecoins remain the prevailing focus in the sector, yet more investigation is necessary to examine their connection to sustainability. Themes like “blockchain” and “digital currency” identified in Q4 are essential and pivotal to the progress of the profession. Additionally, there are no themes in Q3. Thus, the theme analysis indicates that more investigation is necessary regarding the sustainable growth of the cryptocurrency market and the possible mitigation of volatility [21,22].

5. Discussion

The development of stablecoins is poised for a significant shift towards sustainability. The environmental implications of blockchain technology are under heightened examination, prompting future stablecoin development to emphasize sustainable practices. Proof of Stake (PoS) and other ecologically sustainable alternatives are widely used in energy-efficient consensus mechanisms, which is a vital strategy. The carbon footprint of stablecoin ecosystems is significantly reduced by these measures, which also lower energy use. The creation of algorithmic stability models offers the opportunity for price stability without requiring significant collateral, hence reducing the environmental effect [1,4,15,30].

However, the role of stablecoins in the sustainable development of the cryptocurrency market has been limitedly investigated by the academic community. Thus, the objective of this study was to examine the deepening insights into the function of sustainable stablecoins and their contribution to the stability or volatility of the cryptocurrency market, their designs and safe-haven characteristics, as well as the relationships between stablecoins and other cryptocurrency assets and marketplaces, especially Bitcoin [17,18,31].

Findings of the research highlight the strong synergy between stablecoins and smart contract offers, which can offer several benefits to both investors and businesses. Smart contracts are virtual agreements that automatically execute upon the fulfillment of specified conditions, serving as the most efficient means of enforcing contractual commitments between parties. Smart contracts may improve the stability of stablecoins by regulating supply and demand, limiting their use, and facilitating asset exchanges. The use of smart contracts for stablecoins has several advantages, such as security, efficiency, and transparency. The elimination of middlemen enhances transaction execution by making it safer and more efficient, hence reducing the chance of fraud or exploitation. Thus, the interconnection among the themes of stablecoins and smart contracts can lead to a more stable and sustainable environment for the shareholders in the cryptocurrency field [32,33,34].

Additionally, results of the bibliometric analysis demonstrate the development of stablecoins and their role as a digital safe haven for cryptocurrencies. The cryptocurrency markets have seen heightened confidence due to the introduction of several new stablecoins. This may result in a decline in the risk management industry and an escalation in trading volume and activity. Stablecoins enhance market value by their transactional efficiency and stability, yet they provide few incentives. Traders use stablecoins as a safeguard against market downturns, providing a secure haven for their digital assets until market conditions normalize. Stablecoins are used globally since they provide a more efficient and economical means for bill payments, allowing customers to harness blockchain technology without apprehensions about short-term price volatility.

Furthermore, results of the current study can contribute to the development of sustainable stablecoin ecosystems that significantly help to solve the mitigation of the global environmental objectives. Moreover, the growing importance of blockchain technology in certifying sustainable practices and enhancing supply chain transparency will provide customers with a concrete means to assess the environmental effect of stablecoins. The cryptocurrency sector will undergo a significant transformation towards environmentally and morally responsible innovation in the realm of sustainable stablecoin development, establishing a new benchmark [17,35].

Therefore, the findings of the current research provide some crucial implications in both the academic and industry communities. Specifically, this research highlights that stablecoins provide efficiency and stability within the dynamic realm of digital finance, countering the volatility often linked to cryptocurrencies. These digital currencies are tethered to robust reserve assets and provide a reliable medium of trade that maintains its value over time. The unique characteristic of stablecoins might revolutionize the framework of global trade by significantly enhancing transaction efficiency, reducing costs, and streamlining payment processes. Historically, international trade payments include a complex network of banks and intermediaries, each taking a portion of the transaction as fees or commissions. This increases operating costs and causes unnecessary complexity and delays in financial operations.

Conversely, stablecoins provide a simple and cost-effective alternative. Corporations may use corporate accounts on cryptocurrency exchanges to conduct payments in stablecoins, therefore substantially reducing or perhaps eradicating the costs linked to asset transfers. In international trade, time corresponds to monetary worth. The protracted processing times for international transactions in the conventional banking system fail to meet the demands of today’s fast-paced economic environment. Stablecoins provide a nearly immediate solution, enabling transaction completion within seconds, irrespective of location. This rapid transfer capability improves trade, liquidity, and operational efficiency for international businesses. A significant advancement of stablecoins is their compatibility with smart contracts on blockchain networks. These programmable contracts can enclose funds until they meet certain conditions, thereby automating and guaranteeing payment distribution without the need for human intervention. This feature increases transaction security and reduces bureaucratic barriers associated with overseas trade; hence, it expedites the process and enhances dependability. This study emphasized that stablecoins have rapidly emerged as the foundation of the cryptocurrency ecosystem, accounting for 50% of all on-chain activity. They provide stability and a reliable means for transactions, connecting risky cryptoassets with fiat currency. Effortlessly incorporated into systems such as Stripe and PayPal, they allow people to interact with cryptocurrency without requiring technical expertise. Stablecoins are transforming remittances and cross-border commerce via rapid, cost-effective payments, particularly in areas experiencing currency difficulties, such as 70% of Africa. Their distinctive allure to both crypto veterans and novices promotes their extensive adoption, establishing them as a pivotal force in the advancement of finance.

The current study’s results may also help people switch to new blockchain technologies that are better at solving the problems of scalability and efficiency that come with the most common blockchains. Blockchains generate the majority of stablecoins using Proof of Work (PoW) consensus mechanisms. This implies that miners, who are individuals on the network, are compelled to engage in a competitive effort to solve the intricate riddles required to verify new transactions and add new blocks. As a result, PoW blockchains are not only less scalable and sluggish, but they are also exceedingly energy intensive. In new blockchain networks that use Proof of Stake (PoS) or proof-of-history (PoH) consensus mechanisms, lowering the number of network participants (or “validators”) lowers the amount of computing power needed to check each block transaction. This results in an increase in speed. These networks, which include Tron, Avalanche, Algorand, and Solana, are more scalable and have lower transaction costs than the Ethereum or Bitcoin networks, allowing for a greater number of transactions to be executed per second. Additionally, the results suggest that stablecoin users will be able to redeem their stablecoins at any time and at par value with the referenced official currency. Users should also be able to readily access information about the redemption terms, as is the case with traditional PSPs. Nevertheless, stablecoin issuers limit users’ redemption options and provide inadequate public disclosure regarding their redemption policies. For instance, the most significant stablecoin issuers provide redemption services only once per week or during business hours. Also, you might not always be able to redeem at face value in the official currency of the denomination. This means that redemptions are either subject to reserve valuation or must be made in-kind. In certain instances, holders of stablecoins are also subject to redemption limits or high minimum thresholds. This makes them unredeemable for most regular retail users. Also, consumer protection measures like requirements for transparency, refunds, protection from excessive fees, and punishments for wrongdoing do not apply to stablecoins at this time.

The examination of the carbon footprint and environmental impacts of stablecoin development has shown a notable alignment between the growing blockchain industry and global sustainability initiatives. It is essential to address the environmental challenges presented by the fundamental technologies of stablecoins, considering their increasing significance in the digital financial ecosystem. Consequently, future research proposals may concentrate on examining the overall carbon footprint of stablecoin ecosystems, which is substantially affected by the widespread use of energy-intensive consensus mechanisms, particularly in Proof of Work (PoW) networks. This will underscore the need for the industry to embrace more sustainable options, such as Proof of Stake (PoS) or other energy-efficient consensus methodologies. The transition to a more sustainable stablecoin environment requires the collaborative involvement of all stakeholders, including developers, blockchain platforms, and regulators. The industry may markedly reduce its environmental impact by prioritizing energy efficiency, embracing innovative technologies, and encouraging responsible practices.

6. Conclusions

In the fluctuating cryptocurrency market, stablecoins have become a crucial tool, offering a measure of certainty in an otherwise erratic landscape. The creation of sustainable stablecoins has become a vital area in the quest for environmental accountability. The bitcoin community is diligently seeking novel methods to mitigate the carbon footprint linked to blockchain technology, especially inside Proof of Work (PoW) consensus procedures. We acknowledge this problem. Carbon offsetting is a strategy that entails investing in ecologically advantageous projects to reduce emissions. This concerns the distribution of a segment of transaction fees or the offering of incentives to advance renewable energy, forestry, or other carbon reduction measures in stablecoin development.

This study examines the role of stablecoins in promoting the sustainable growth of the financial industry. We obtained 197 research publications from the Scopus database and examined them using the R statistical programming language together with the bibliometric tools Biblioshiny and VOSviewer to achieve the study aim. The findings highlight the crucial function of stablecoins in the decentralization of financial services, especially when integrated with smart contracts. Furthermore, the results indicate the function of stablecoins as a refuge inside the bitcoin market.

In conclusion, stablecoins have the potential to provide a novel and efficient means for funding and promoting ecologically friendly projects. Stablecoins may assist environmental organizations in overcoming financial obstacles by providing a dependable, transparent, and efficient digital currency framework. Stablecoins provide a feasible option for investigation in environmental funding, notwithstanding the inherent risks and limitations. This is the current situation, despite numerous challenges and inherent risks.