Case Study

Harsimran Kaur

Yorkville University

BUSI4023 Contemporary Issue in Business: A Case Approach

Professor Karen Ervin

27 April 2025
 Introduction

During early 2023 the Royal Bank of Canada (RBC) which operates as Canada's largest and

most globally known financial organization encountered an essential strategic issue concerning Bitcoin

alongside digital assets. The blockchain mechanism behind Bitcoin enabled financial development while

producing major environmental issues because of the large amount of power needed to operate Bitcoin

mining operations. RBC committed to its Climate Blueprint through environmental goals but aimed to

transition its operations toward a net-zero economy. RBC's Crypto Asset Innovation director Karim

Hamasni received the mission to inspect whether the bank should classify Bitcoin-linked products or

solutions because of the wide gap between Bitcoin mining emissions and RBC's sustainability approach.

The recommendation required proper consideration of developing financial possibilities versus future

business hazards and environmental consequences and compliance obligations.

Company Background

The Royal Bank Canada operates as a diversified financial company which maintains status among the

leading global banks according to market capitalization. RBC provides banking solutions for

personal customers and commercial organizations as well as wealth management services and

insurance protection along with investor services and capital markets offerings throughout the

global market. The organization places its fundamental values on three main pillars that include

client trust alongside environmental leadership and innovation.

RBC established the Climate Blueprint in 2021 as its enterprise-wide declaration to lead clients and

maintain operations toward achieving a net-zero economy before 2050. RBC has established a

three-part approach that combines renewable energy investments with bank carbon emission
 decreases and assistance for clients to select climate-friendly options. Through annual ESG

Performance Reports RBC shares its environmental accomplishments to keep stakeholders of its

performance in the spotlight.

RBC had not entered the cryptocurrency market during early 2023 but established a Crypto Asset

Innovation team because of growing digital asset adoption. The research group investigated the

financial effects of crypto on the financial sector as they assessed if crypto service provision

would align with RBC business values and its anticipated expansion strategies.

Identification of Issues/Problems

 Environmental Reputational Risk:

The annual 117.96 TWh energy consumption of Bitcoin mining operations equals the total yearly energy

use of Argentina (Sedlmeir et al., 2020). RBC’s Climate Blueprint appears to be in conflict with

the establishment of Bitcoin services.

 Climate Impact:

The carbon emissions produced during Bitcoin mining have a substantial negative impact on climate

change. The worldwide emissions from Bitcoin operations might lead to temperatures exceeding

2°C according to Mora et al. (2018) predictions.

  Regulatory Volatility:

Bitcoin mining activities face restrictions from China alongside Kazakhstan and Kosovo because of their

negative impact on the environment (Pun et al., 2023). Upcoming government policies might

damage the stability of crypto services.

 Market Demand and Competitive Pressure:

Digital assets have gained considerable popularity from customers while various businesses launch new

crypto service platforms. RBC faces the danger of shedding innovative clientele who will choose

alternative financial institutions because of its delayed entrance into the sector.

 Technological Rigidity of Bitcoin:

PoW in Bitcoin requires significant energy usage although Ethereum 2.0 plans to adopt PoS to cut

environmental harm.

 Economic Uncertainty:

Strategic planning becomes challenging because Bitcoin faces extreme price volatility when it increased

from $29,374 in December 2020 to more than $65,000 in November 2021 before suffering a

major price decline (Pun et al., 2023).

 Analysis of Issues

 Environmental Reputational Risk

The responsible banking platform of RBC together with sustainable leadership defines its brand

foundation. The Bitcoin market entry without solving environmental challenges would lead to

“greenwashing” accusations while losing potential support from ESG-focused investors and

clients.

Almost sixty percent of Bitcoin mining operations use nonrenewable energy sources according to the

Cambridge Bitcoin Electricity Consumption Index (Sedlmeir et al., 2020).

 Climate Impact

Bitcoin mining operations constantly emit carbon dioxide estimated at between 22–69 megatons

annually based on Mora et al. (2018). Operating Bitcoin services would directly violate RBC's

Climate Blueprint policy which seriously threatens stakeholder trust.

 3. Regulatory Volatility

International financial agencies show greater apprehension about the environmental effects caused by

cryptocurrency operations. The sudden implementation of new crypto-related policies creates

operational risks for RBC as well as potential damage to its reputation because of strict crypto

venture restrictions (Pun et al., 2023).

  4. Market Demand and Competitive Pressure

Bitcoin services have become mainstream within the rapidly expanding cryptocurrency market since

several financial institutions already offer Bitcoin solutions. Postponing entry could make RBC

seem behind the times by not following clients who want digital asset integration particularly

those who are younger in age (Royal Bank of Canada SWOT Analysis, 2025).

 5. Technological Rigidity of Bitcoin

Bitcoin users avoid adopting new energy-efficient algorithms to replace their existing Proof of Work

system. The decentralized structure of Bitcoin opposes technical alterations because of its high

decentralization level (Truby, 2018).

 6. Economic Uncertainty

The dramatic price swings of Bitcoin cause substantial challenges for financial planning purposes. The

currency's market value remains volatile because of official regulations as well as shifting

mining complexities and speculative investment patterns (Pun et al., 2023).

 Development of Alternatives

Alternative 1: Full Entry into Bitcoin Services

The biggest advantage of this approach includes seizing market leadership before others and addressing

client requirements and generating substantial early profits.

Significant reputational and environmental risk, exposure to regulatory volatility.

Alternative 2: Selective Entry with Sustainability Conditions

The program enables RBC to lead the market in eco-friendly cryptographic assets while upholding its

environmental sustainability goals and drawing environmentally conscious customers.

Entering Bitcoin services comes with two drawbacks, which include limiting product options and

needing advanced sustainability verification systems.

Alternative 3 centers on developing exclusive concentration on alternative Proof of Stake

cryptocurrency systems.

The support of crypto innovation combines with minimal environmental impact enabling RBC to access

the sustainable digital asset marketplace.

The cryptocurrency market continues to be led by Bitcoin because its popularity shows strong client

preference for Bitcoin.

Alternative 4: Delay and Monitor

The delay tactic protects us from urgent risks through an extended period of observation for regulatory

changes and market trends.

The company faces two drawbacks because it loses its initial market position, and its innovative

positions may suffer from the public eye.

Recommendation

 Among all the options offered Selective Entry with Sustainability Conditions (Alternative

2) stands out as the best strategic selection.

 This strategy enables RBC to:

 The bank can access crypto market opportunities through suitable entry points that

protect its Climate Blueprint.

 The company should maintain its status as ESG leader through environmental

sustainability in mining operations.

 To avoid regulatory dangers RBC should invest in green crypto products.

 The bank should enter the Bitcoin service market only if complete Bitcoin mining data

demonstrates more than 90% use of renewable energy for operations. The company

should start providing services to eco-friendly cryptocurrencies while it continues

expanding its business operations.

 Action Plan

Phase Action Timeline Responsibility

Phase 1 Market Research and 0–3 months Crypto Innovation
Vendor Selection – Team
Identify Bitcoin
mining pools
powered by
renewable energy
Phase 2 Green Bitcoin Product Development
Product Development Team
– Design custody
3–6 months
services and ETFs
focused on green
mining sources
Phase 3 Pilot Launch – Test 6–9 months Pilot Program Team
green Bitcoin
products with select
clients; monitor
feedback
Phase 4 Expand Offerings – 9–12 months
Launch eco-friendly
Crypto Asset
crypto services (e.g.,
Division
Ethereum 2.0,
Cardano)
Phase 5 Ongoing ESG Ongoing ESG Compliance
Monitoring – Team
Establish KPIs and
audit sustainability
performance

Conclusion

RBC needs to regulate their cryptocurrency involvement with environmental sustainability

benchmarks as a primary consideration. RBC faces potential harm to its reputation alongside
repeated violations of its climate pledges if the bank implements Bitcoin operations without

protective measures.

RBC can establish itself as a responsible leader in digital assets by focusing on Bitcoin versions

backed by renewable energy and participating with cryptocurrencies that demonstrate eco-

friendly features. Such planning produces a lasting development process which matches market

transformations together with RBC's ethical responsibilities and regulatory demands.

References

Mora, C., Rollins, R. L., Taladay, K., Kantar, M. B., Chock, M. K., Shimada, M., & Franklin,

E. C. (2018). Publisher correction: Bitcoin emissions alone could push global warming above

2 °C. Nature Climate Change, 9(1), 80.

Pun, H., Mazhari, A., & Hamasni, K. (2023). Royal Bank of Canada: Bitcoin Mining and

Climate Change. Ivey Publishing.

Royal Bank of Canada SWOT Analysis. (2025). Royal Bank of Canada SWOT Analysis, 1–7.

Sedlmeir, J., Buhl, H. U., Fridgen, G., & Keller, R. (2020). The energy consumption of

blockchain technology: Beyond myth. Business & Information Systems Engineering, 62(6),

599–608. [Link]

Truby, J. (2018). Decarbonizing Bitcoin: Law and policy choices for reducing the energy

consumption of blockchain technologies and digital currencies. Energy Research & Social

Science, 44, 399–410. [Link]