The recent improvements in digital finance seem impressive in many respects. However, emerging sustainable finance literature reveals that improvements in digital finance have limited positive impacts on the green finance agenda. This disconnection raises concerns about its benefits from a sustainability perspective and brings into consideration the role of policymaking to improve the green digital finance framework. This chapter investigates the role of government policies to develop a more effective green digital finance framework based on the Paris Climate Agreement goals and the sustainable development goals. Utilizing a literature review and selected case studies, we suggest that government policy actions are critical for successful implementation at national and global levels. We argue that digital finance initiatives can be channeled into green digital finance in a well-designed ecosystem. Specifically, governments can support green digital finance by implementing sound regulatory policies as well as establishing incentives through green data initiatives, lower taxes, and technological infrastructure investments.