Can ICO Markets Offer Insights into Marketising Sustainable or Social Finance? Proposals for a Revolutionary Regulatory Framework

34 Pages Posted: 3 Dec 2018

See all articles by Iris H-Y Chiu

Iris H-Y Chiu

University College London - Faculty of Laws; ECGI

Edward Greene

University College London; Columbia University

Date Written: November 26, 2018


This paper aims to bring together two areas seemingly far apart in finance- the world of sustainable and social finance and the largely unregulated markets in initial coin offerings (ICOs). Insights of cross-fertilisation can be derived to deal with a question that sustainable and social finance has struggled with, viz, the scaling up of such finance by fund-raising in markets rather than through institutions or intermediaries.

The gaps in finance for sustainable and social needs are well-canvassed. These gaps are largely due to the slow pace in successful marketization of such finance, perceived to be often incompatible with the needs and requirements of investors in conventional markets. Conventional investment instruments such as securities and other asset classes have attained characteristics of ‘investibility’ and ‘marketability’ that sustainable and social finance are not yet fully able to offer. Further, these characteristics are secured and reinforced by financial regulation of traditional financial instruments. Hence, sustainable and social finance continue to face obstacles in terms of scaling up and raising funds.

We offer a proposal to scale up the marketization of sustainable and social finance, by building on insights derived from the controversial ICO markets. We argue that ICO markets hold insights for transforming sustainable and social finance into a different asset class altogether, and the application of these insights may greatly increase the marketization potential of such finance. In this proposal we move away from treating sustainable and social finance as securities or securitised assets, and propose regulatory reforms to support such a new asset class. These regulatory reforms move away from a merely incremental approach that is focused on encouraging conventional investors to diversify their portfolios to include sustainable and social finance.

In this analysis, we are not seeking to fit sustainable or social finance into ICOs or suggest that they should take advantage of the hitherto unregulated ICO markets. We are also keenly aware of the nascent efforts in regulatory treatment of ICOs, especially in relation to the extension of securities regulation over ICOs by the US Securities and Exchange Commission. We argue that policy-makers would miss the innovative and transformative elements in ICOs if an approach is forced upon ICOs to submit to existing regulatory regimes for securities and commodities. We take a different approach that breaks away from the conventional mould, allowing new asset classes to be created and access to finance to be broadened. This result will crucially require the support of new regulatory policy. Our proposal has the potential to liberate sustainable and social finance to the widest markets possible. We capitalise on the wide and borderless appeal that ICOs have already gained, in reaching out to communities and forming new markets for sustainable and social finance. Our proposal ultimately seeks to integrate the social and commercial dimensions in a new way in fund-raising, towards the construction of a new form of capitalism based on the crowdsourcing society for creating value in an integrated social-commercial manner. This phenomenon, powered by technology, meshes the social and commercial dimensions in fund-raising and disrupts existing establishments of marketplaces where sustainable and social finance have been inadequately served.

Keywords: initial coin offerings, cryptoassets, social finance, sustainable finance

Suggested Citation

Chiu, Iris H-Y and Greene, Edward, Can ICO Markets Offer Insights into Marketising Sustainable or Social Finance? Proposals for a Revolutionary Regulatory Framework (November 26, 2018). Available at SSRN: or

Iris H-Y Chiu (Contact Author)

University College London - Faculty of Laws ( email )

Gower St
London WC1E OEG, WC1E 6BT
United Kingdom

ECGI ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels

Edward Greene

University College London

Gower Street
London, WC1E 6BT
United Kingdom

Columbia University

3022 Broadway
New York, NY 10027
United States

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