Welcome to USD1emissions.com

This page explains how to think about, measure, and disclose the environmental footprint of USD1 stablecoins. The focus is educational and neutral. The term USD1 stablecoins is strictly descriptive: any digital token designed to be redeemable one for one with U.S. dollars. We do not endorse or represent any particular issuer, network, or brand.

Understanding emissions for USD1 stablecoins requires looking past marketing claims and into the underlying activities that make the system work. These include consensus and settlement on public blockchains, reserve custody and treasury operations, and the day‑to‑day computing that wallet providers, market venues, and compliance teams perform to keep everything running. This guide shows how to set boundaries, choose data sources, and build a transparent accounting that others can verify.

What “emissions” means for USD1 stablecoins

When we talk about emissions here, we mean greenhouse gas (GHG) emissions expressed as carbon dioxide equivalent (CO2e), which bundles the warming effects of different gases into one comparable number. GHG accounting typically groups emissions into:

• Scope 1 (direct emissions) — fuel burned by an organization’s own equipment or vehicles.
• Scope 2 (purchased electricity, heat, or cooling) — emissions from the electricity an organization buys.
• Scope 3 (value‑chain emissions) — everything else upstream and downstream, such as suppliers, customers, and financed activities. Formal definitions come from the Greenhouse Gas Protocol corporate standard. ^[7]

For USD1 stablecoins, the footprint draws from several sources:

1. Blockchain settlement: the electricity used by validators (in proof‑of‑stake, or PoS) or miners (in proof‑of‑work, or PoW) to order and finalize transactions.
2. Reserves and treasury: bank operations, securities servicing, and capital‑markets activities associated with holding and managing reserves such as cash and government paper.
3. Business operations: cloud computing, office electricity, travel, and other routine activities of issuers and service providers.
4. User ecosystem: wallets, market venues, analytics, and compliance providers that process and relay USD1 stablecoins transactions.

Not all of these sources sit under one entity’s control. This makes boundary setting and clear documentation essential.

Why consensus mechanisms matter

The energy intensity of settlement depends heavily on the consensus mechanism of the underlying chain:

• Proof‑of‑work (PoW) relies on energy‑intensive computations to secure the network. Bitcoin is the best‑studied case; Cambridge’s methodology is widely cited for estimating Bitcoin’s electricity demand and uncertainty bounds. ^[3],[14]
• Proof‑of‑stake (PoS) secures the network with financial stake instead of ongoing computational races. After the 2022 “Merge,” the Ethereum network shifted from PoW to PoS, cutting its electricity use by about 99.95% according to the Ethereum Foundation, with peer reports estimating similar or even slightly larger reductions. ^[1],[2]

Independent assessments shortly after the Merge estimated post‑Merge Ethereum at roughly 2,600 megawatt‑hours (MWh) per year of electricity and about 870 metric tons CO2e annually, orders of magnitude lower than pre‑Merge levels. ^[2] That change demonstrates why the network choice behind USD1 stablecoins transactions often dominates the settlement emissions story.

Two cautions are important:

1. Per‑transaction numbers can mislead. On PoS systems, incremental energy per extra transaction is tiny compared with the baseline energy of the validator set staying online. It is better to allocate a share of annual network energy to USD1 stablecoins activity using defensible metrics (discussed below).
2. PoW estimates vary. Bitcoin electricity estimates have uncertainty and are updated frequently; understand the high/low ranges and the assumptions behind each model. ^[3],[14]

System boundaries and scopes

A robust footprint for USD1 stablecoins starts with a boundary that others can reproduce:

• Settlement boundary: include the electricity used by the validators or miners on chains where USD1 stablecoins transactions settle. If bridging or wrapping is used, ensure you are counting the chain that finalizes the economic transfer.
• Issuer boundary: include the issuer’s offices, cloud workloads, compliance systems, and any contracted operations integral to issuance and redemption.
• Reserves boundary: include the capital‑markets and securities‑servicing activities needed to hold reserve assets; when in doubt, align with financial‑industry methodologies for financed and facilitated emissions (see PCAF). ^[11],[12]
• Ecosystem boundary (optional disclosure): include wallets and service providers when the goal is a “full‑stack” sector view, but disclose the attribution logic to avoid double counting.

Use Scope 1 for any on‑premise fuels, Scope 2 for electricity, and Scope 3 for the rest, consistent with the Greenhouse Gas Protocol. ^[7]

Frameworks and rules to know

Several widely‑adopted frameworks shape how organizations measure and disclose climate impacts:

• Greenhouse Gas Protocol (GHGP). The corporate standard defines Scope 1, 2, and 3, and includes guidance for electricity accounting (location‑based versus market‑based). ^[7]
• IFRS S2 (ISSB). Effective for annual periods beginning in 2024, IFRS S2 requires disclosures about climate‑related risks, metrics, and targets; it is increasingly referenced by capital markets and regulators. ^[8]
• MiCA (EU). The European Securities and Markets Authority released draft technical standards under MiCA that include sustainability indicators for crypto‑assets—covering energy and GHG metrics and how to present them. ^[9] Methodological support tailored to those indicators has been published for practitioners. ^[10]
• PCAF. The Partnership for Carbon Accounting Financials standard provides methods for financed emissions (Part A) and facilitated emissions in capital markets (Part B). These are directly relevant when attributing reserve‑related and capital‑markets emissions to USD1 stablecoins. ^[11],[12]

In the United States, the SEC’s climate disclosure rule adopted in March 2024 has been stayed and remains in litigation as of mid‑2025; organizations should monitor developments and rely on IFRS S2 or GHGP for consistent practice in the meantime. ^[17],[18]

How to estimate network emissions

Step 1 — Pick reliable activity data

• For PoW, use peer‑reviewed or institutionally backed electricity estimates, such as the Cambridge methodology for Bitcoin. ^[3],[14]
• For PoS, prefer chain‑specific assessments that measure validator hardware and duty cycles. The post‑Merge Ethereum estimates and PoS methodology notes from independent researchers are examples. ^[2],[20]

Step 2 — Map electricity to location‑based grid factors

• Global or regional factors. The International Energy Agency publishes a methodology and dataset of gCO2 per kWh for electricity and heat; these are commonly used for location‑based Scope 2 estimates. ^{[4],[10],[11]}
• United States detail. EPA’s eGRID provides sub‑region emission rates; the 2023 dataset (released January 2025) offers the most recent U.S. coverage. ^[6]
• Global trend context. For background, Ember’s Global Electricity Review reports year‑over‑year changes in average power‑sector intensity (for 2023, about 480 gCO2/kWh globally). Do not use this as a substitute for country‑level factors, but it is useful context. ^[5]

Step 3 — Choose an allocation basis

Because validators on a PoS chain consume relatively fixed energy regardless of whether throughput is low or high, allocate a share of annual network energy to USD1 stablecoins activity using a metric that tracks resource share:

• Share of blockspace or gas used by USD1 stablecoins transfers on the chain. Public explorers show gas usage by contract family; while dynamic and imperfect, it is the most observable proxy on many PoS chains. ^[13]
• Share of bytes or compute used if your chain reports such telemetry with comparable quality.
• Share of validator duties only if your design isolates stable‑value transfer lanes (rare on public chains today).

Document the metric, calculation period, and data sources so others can reproduce your share.

Step 4 — Convert energy to emissions and disclose ranges

Multiply allocated kWh by the appropriate grid factor (kgCO2e/kWh) to obtain emissions. Where chains are geographically distributed, you may disclose a range or weighted scenario if validator locations are uncertain. For PoW networks, show low/central/high scenarios reflecting model bounds. ^[3],[14]

Allocating network emissions to USD1 stablecoins

A transparent allocation should:

1. Separate chains. If USD1 stablecoins settle on multiple chains, perform a chain‑by‑chain allocation and report them individually before aggregation.
2. Use chain‑appropriate metrics. On PoS chains, prefer gas share or blockspace share. On PoW chains, consider share of transactions, but disclose limitations since miner energy scales with hash competition more than throughput.
3. Respect time windows. Use consistent periods (for example, monthly averages for gas share and electricity) and disclose the dates.
4. Avoid double counting. If you publish an ecosystem view that includes service‑provider emissions, make it clear which scopes are issuer‑side versus ecosystem‑side and where boundaries overlap.

What not to do: avoid headline “per‑transaction energy” for PoS chains unless you are very explicit that it is an allocation artifact and not a physical meter reading. A better disclosure leads with annual allocations and offers per‑transaction figures only as a secondary intensity metric for user communication.

Beyond the chain: reserves and operations

Reserves, custody, and capital markets

Reserve management—bank accounts, securities servicing, tri‑party repo, and similar functions—creates facilitated or financed emissions. The PCAF standard is the most widely used reference for attribution:

• Part A (financed emissions). Methods to attribute emissions to balance‑sheet exposures, including government bonds and cash equivalents where the methodology applies. ^[11]
• Part B (facilitated emissions). Methods to attribute emissions to capital‑markets activities where an institution facilitates issuance or trading rather than holding assets on balance sheet. ^[12]

For USD1 stablecoins, disclosures should explain:

• The reserve asset mix and where feasible the proportion in cash, short‑term government paper, and other instruments.
• The methodology for any financed or facilitated emissions attributed to those holdings or activities, aligned with PCAF.
• Whether the disclosure is issuer‑only (narrow boundary) or includes bank and market counterparties (broader boundary), and how you avoid double counting between parties.

Issuer and service‑provider operations

Issuer offices, employee travel, and especially cloud workloads that process compliance, risk, and transfer logic belong in Scope 1, 2, or 3 depending on power sourcing and contracts. IFRS S2 requires disclosure of the metrics, methodologies, and targets used to manage these impacts, making it a practical template even in jurisdictions without mandatory climate rules. ^[8]

Geography and grid intensity

Emissions depend not only on how much electricity is used but where it is used. Location‑based grid factors vary significantly:

• The IEA’s documentation explains how to derive gCO2e/kWh for electricity and heat by country, a common source of factors for international estimates. ^{[4],[10],[11]}
• In the United States, EPA eGRID provides sub‑region factors and is updated periodically; the 2023 release arrived in January 2025. ^[6]
• Global average intensity continues to improve as clean generation scales, but country‑specific factors remain the right starting point. ^[5]

If validator or data‑center locations are unknown, provide reasoned scenarios (for example, weighted by known hosting markets) and clearly label them as such.

A worked example, step by step

This example shows one way to allocate annual settlement emissions to USD1 stablecoins on a PoS chain. Numbers below are illustrative to demonstrate the method; do not treat them as live metrics.

1) Annual network energy. Suppose your primary PoS chain’s annual electricity use is 2,601 MWh, consistent with independent post‑Merge assessments. ^[2] That is 2,601,000 kWh.

2) Grid factor. You choose a location‑based factor appropriate to validator geography. If validator locations are uncertain, you may present two views:

• Scenario A (global average context): 0.480 kgCO2e/kWh, roughly the 2023 global power‑sector intensity. ^[5]
• Scenario B (chain‑specific estimate): 869.78 tCO2e per year taken directly from the chain‑specific lifecycle assessment (post‑Merge estimate), which already embeds a set of assumed grid factors. ^[2]

Using Scenario A, network emissions would be:

• 2,601,000 kWh × 0.480 kgCO2e/kWh = 1,248,480 kgCO2e (about 1,248.5 tCO2e).

Using Scenario B, you simply cite ~870 tCO2e with the source and methodology.

3) Allocation share. Next, allocate a share to USD1 stablecoins using gas share as the resource proxy. Assume 15% average gas share over your chosen year (illustrative; in practice, measure this from a public explorer’s gas share dashboard and archive the query output). ^[13]

4) Allocated settlement emissions.

• Scenario A: 1,248.5 tCO2e × 0.15 ≈ 187.3 tCO2e attributed to USD1 stablecoins settlement on this chain for the year.
• Scenario B: 869.8 tCO2e × 0.15 ≈ 130.5 tCO2e attributed under the chain‑specific estimate.

5) Intensity communication (optional). If you also want a per‑transaction intensity for user education, compute it as allocated annual emissions divided by the number of USD1 stablecoins transfers on that chain in the same period. Label it clearly as an allocated intensity, not a direct physical meter reading, and present annual allocations first to avoid misinterpretation.

6) Multi‑chain aggregation. Repeat the steps for each settlement chain, then sum the allocated totals to obtain the multi‑chain settlement emissions for USD1 stablecoins.

7) Add reserves and operations. Separately calculate reserve‑related financed or facilitated emissions using PCAF and add issuer operational scopes. Present the final disclosure with segmented totals so stakeholders can see the contribution from settlement versus reserves versus operations.

This approach produces a transparent footprint that others can recompute given the same inputs.

Reporting template

A concise, replicable disclosure for USD1 stablecoins should contain:

1. Scope and boundary. Chains covered, organizational perimeter (issuer‑only or issuer plus ecosystem), and period covered.
2. Method choices. Activity data sources for each chain (with links), allocation metric used (for example, gas share), and rationale.
3. Electricity factors. Location‑based grid factors with references (IEA, EPA eGRID, or national sources) and any market‑based instruments such as energy‑attribute certificates (disclosed separately). ^[4],[6]
4. Settlement results. Annual chain‑by‑chain totals allocated to USD1 stablecoins, plus optional workbooks showing the calculation.
5. Reserves and capital‑markets attribution. PCAF method references, data vintage, and any estimation procedures used. ^[11],[12]
6. Operations. Scope 1 and 2 totals and key Scope 3 categories (cloud services, travel, purchased goods and services), aligned with IFRS S2 or GHGP. ^[7],[8]
7. Uncertainty and ranges. High/low cases for PoW networks and validator‑location scenarios for PoS networks. ^[3],[14]
8. Targets and actions. Any reduction targets, procurement of clean electricity, efficiency upgrades, or validator‑location incentives.
9. Assurance. Whether numbers are third‑party assured and at what level.
10. Change log. Method or factor updates from prior periods and their impact.

Quality of offsets and claims

Some organizations choose to neutralize residual emissions by funding emission reductions or removals. If you communicate any such claims, quality standards matter:

• The Integrity Council for the Voluntary Carbon Market (ICVCM) published Core Carbon Principles (CCPs) as a benchmark for high‑integrity carbon credits and an assessment framework for programs. ^[15]
• U.S. federal agencies issued a Joint Policy Statement and Principles on voluntary carbon markets emphasizing integrity and transparency. ^[16]

Only use credits that meet rigorous program‑level criteria, and prioritize real, additional, independently verified results with durability matching your claim timeframe. Keep neutralization separate from abatement in your metrics and avoid implying that offsets erase the need to reduce your own operational and value‑chain emissions.

Frequently asked questions

Do USD1 stablecoins “cause” miner or validator electricity use?
On PoW, miners scale with market incentives rather than throughput; allocation to USD1 stablecoins is therefore a share of a system‑level energy baseline, not a marginal cause‑effect. On PoS, validator energy is mostly steady across throughput ranges; again, use a share of annual network energy rather than a per‑transaction “meter.”

Which is the “right” grid factor to use?
For location‑based Scope 2, use country or sub‑region factors from IEA or EPA eGRID. For a market‑based view, incorporate contract instruments (such as energy‑attribute certificates) per GHGP, while still disclosing the location‑based result for comparability. ^[4],[6],[7]

Can I rely on a single “global average” factor?
Use global context for narrative only. Proper accounting uses the geography where electricity is consumed. If locations are unknown, disclose a reasoned scenario and the uncertainty.

What if my chain spreads validators across many countries?
Build a weighted blend using the best available evidence for validator distribution. Explain your weights and provide a sensitivity analysis.

Are per‑transaction emissions valid for communication?
They can help user understanding, but they are allocations, not physical measurements. Always lead with the annual allocation and publish the method.

What if I operate in the United States—do I have to follow the SEC climate rule?
As of September 2025, the SEC’s climate disclosure rule adopted in March 2024 has been stayed and is entangled in litigation; the Commission has also taken steps not to defend the rule. Organizations often align disclosures to IFRS S2 and GHGP pending clarity. ^[17],[18]

Glossary

Blockchain settlement: the process by which a network orders, validates, and finalizes transactions.
Blockspace: the limited capacity in a block to include transactions; fees allocate this capacity among users.
Carbon dioxide equivalent (CO2e): a common unit that expresses the warming impact of different greenhouse gases using a single factor relative to carbon dioxide.
Emission factor: a coefficient that converts an activity (such as kWh) into emissions (such as kgCO2e).
Financed emissions: emissions associated with assets held on a financial institution’s balance sheet, attributed per PCAF. ^[11]
Facilitated emissions: emissions associated with capital‑markets intermediation rather than balance‑sheet holdings, attributed per PCAF. ^[12]
Gas (blockchain): the abstract unit of computational work that determines fees and prioritization on some chains.
Greenhouse gas (GHG): gases that trap heat in the atmosphere, including carbon dioxide, methane, and nitrous oxide.
Proof‑of‑stake (PoS): a consensus mechanism where validators stake assets and are selected to propose and attest blocks, requiring relatively little energy compared with PoW.
Proof‑of‑work (PoW): a consensus mechanism where miners compete to solve cryptographic puzzles, expending significant electricity.
Scope 1, 2, 3: standard categories for corporate emissions (direct, purchased energy, and value chain). ^[7]