Page 40 - "Green Investments and financial technologies: opportunities and challenges for Uzbekistan" International Scientific and Practical Conference

“Yashil investitsiyalar va moliyaviy texnologiyalar: O‘zbekiston uchun imkoniyatlar va muammolar” mavzusida xalqaro
ilmiy-amaliy anjuman materiallari to‘plami (Toshkent, JIDU, 2025-yil 7-may)

reached USD 805 billion by the end of 2023, driven by demand for ethical
investment and Sharia-compliant finance (IFSB, 2024). Similarly, the green bond
market surpassed USD 1.1 trillion globally in 2023, underscoring the growing
investor appetite for climate-aligned financial products (OECD, 2024). This study
compares the implementation and strategic utilisation of modern financial
instruments in three global financial hubs: the United States, the European Union,
and Singapore. These regions have been selected due to their distinct yet influential
approaches to market governance, innovation adoption, and financial integration.
The United States stands out for its scale, advanced derivatives markets, and
regulatory pluralism. The European Union, by contrast, has become a leader in
sustainable finance, capital market harmonisation, and ESG-driven investment.
Singapore, representing Asia’s premier financial innovation hub, exemplifies
regulatory agility, digital finance integration, and Islamic finance convergence.

Modern financial instruments are the cornerstone of today’s global financial
architecture. Their emergence reflects the increasing complexity of financial
markets and the diversification of investor demands, institutional frameworks, and
macroeconomic objectives. These instruments are not only vehicles for capital
allocation but also tools of financial innovation that enhance risk sharing, liquidity
creation, and intermediation efficiency. According to the International Financial
Reporting Standards (IFRS), a financial instrument is “any contract that gives rise
to a financial asset of one entity and a financial liability or equity instrument of
another entity” (IFRS, 2024). Financial instruments function as structured
agreements that facilitate capital flows, manage risk, and create value through
market-based transactions. They operate within a framework of enforceable
contracts, regulatory oversight, and pricing mechanisms determined by market
forces.

Financial instruments can be classified into four major categories based on form,
function, and underlying market theory:

1. Capital Instruments – Represent ownership in a firm (e.g., equities). These
instruments grant residual claims on profits and governance rights.
2. Debt Instruments – Such as bonds or sukuk, entail borrowing arrangements
and fixed or floating interest obligations.
3. Derivative Instruments – Contracts whose value is derived from underlying
assets such as stocks, interest rates, or commodities. Includes options, futures,
forwards, and swaps.
4. Digital Instruments – Blockchain-based instruments such as
cryptocurrencies, utility tokens, security tokens, and non-fungible tokens
(NFTs), reflecting decentralised and programmable finance.

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