Blockchain-Driven Green Finance: The Interplay of Transparency, and Security

Abstract

This study investigates the transformative potential of blockchain technology in fostering secure and transparent green finance systems. As global environmental and financial challenges intensify, the demand for trustworthy, traceable, and secure financing of sustainable development initiatives has grown significantly. Blockchain, with its features of decentralization, immutability, and enhanced traceability, presents a novel opportunity to improve the integrity of green financial ecosystems. Using a quantitative approach, the research surveyed 361 respondents from various financial institutions in Pakistan actively engaged in blockchain-driven green finance initiatives. The study employed PLS-SEM and moderated mediation analysis (PROCESS Macro Model 7) to examine how blockchain implementation influences transparency and security, and how these in turn affect green finance. Findings demonstrate that blockchain significantly enhances transparency, which positively influences green finance outcomes, while security acts as a critical moderating factor in this relationship. Transparency mediates the effect of blockchain on green finance, reinforcing the importance of building trust and accountability. The results have implications for policymakers, financial institutions, and technology providers aiming to integrate blockchain into sustainable financial frameworks. This study helps to fill the gap in the available empirical support available on the interaction of transparency and security in green finance through blockchain. This paper examines the effect of Green Financial (GrFin) on the adoption of Blockchain (BCh) and Transparency (Transp) mediates or causes this effect, whereas Security (Sec) modulates this. The findings indicate the existence of a significant positive impact of Green Finance on Blockchain adoption. Transparency somewhat moderates such effect but it has a small negative effect on Blockchain adoption. Security is the moderator of GrFin Transp relationship and an increase in security weakens this relationship. Green Finance has an indirect impact on the Blockchain adoption via Transparency, which is conditional on Security and hence exhibits a moderated mediation. This evidence underlines that in the case of promoting Blockchain through Green Finance projects, transparency and security should find a balance.