The Future of Digital Assets and Energy Implications


Spring 2023

The United States (U.S.) and the global financial community are at an inflection point with the advent of digital assets. Policymakers are facing a major dilemma regarding the regulatory guardrails that must be put in place for Decentralized Finance (DeFi), Stablecoins, and Central Bank Digital Currencies (CBDCs). This study examined these three distinct types of digital assets, while also providing a comprehensive outline of case studies pertaining to the use of digital assets (DeFi and Non-Fungible Tokens) by art auction houses. 

The analysis aimed a) to describe the current regulatory landscape of digital assets, b) to identify barriers for adoption, c) to explain energy implications, d) to design policy measures, and e) to generate data-driven predictions about the future of money and digital assets. The aforesaid analysis included open-source data, a multidimensional meta-analysis of past academic investigations and over a dozen interviews with thought leaders, influencers, academics, various Subject Matter Experts (SMEs), and stakeholders operating in the field. Thoroughly evaluating these emerging technologies and digital milieus is of paramount importance for the future of energy consumption, climate change, and greenhouse gas emissions. Only through multidimensional, data-driven approaches can decisionmakers improve policy design and facilitate the implementation of the 2030 Agenda for Sustainable Development. In this context, the project proposed innovative policy solutions across four different dimensions (stablecoins, cryptocurrencies, NFTs, and central bank digital currencies) with the purpose of staying on top of prospective threats while taking advantage of the benefits pertaining to digital transformation.