Linkages Among Sustainable Cryptocurrencies, Developed, and Emerging Economies: An Empirical Study

The growing concerns about the exorbitant energy usage by the cryptocurrency market have become a topic of much discussion lately. With the aim of achieving the 17 SDG goals by 2030, finding effective solutions for making cryptocurrencies sustainable is important. One such solution is sustainable cryptocurrencies. This article employs time-varying parameter vector autoregression to examine the linkages between the sustainable cryptocurrencies (Ripple and Cardano), and fiat currencies of G7 and BRICS nations. The study considers the daily closing prices of the variables from 6 June 2019 to 6 June 2024 to identify the total connectedness among these variables, the net transmitters, and the net receivers of shocks. The analysis concludes that there is moderate connectedness among the variables. The findings reveal that Ripple, Cardano, Chinese Yuan, and Japanese Yen were net transmitters during the period studied. The study also concludes that global catastrophic events have little influence on the connectedness among the variables. The article has important implications for both investors and policymakers. Investors can rely on sustainable cryptocurrencies as hedges against fiat currency fluctuations, and policymakers can devise regulatory frameworks promoting more use of sustainable cryptocurrencies for a sustainable future.