The global cryptocurrency adoption index continues to rise; however, significant barriers still impede mainstream acceptance of crypto assets.
One of the key barriers to crypto adoption is regulatory uncertainty. Additionally, existing blockchain networks’ scalability issues may also dissuade users from adopting cryptos. This article focuses on how stakeholders can overcome such hurdles to crypto adoption.
Lack of Regulations
Cryptocurrencies are digital currencies utilizing cryptography for security, and have gained immense popularity among individuals dissatisfied with traditional financial institutions, who want more control of their money and more control of when and how it’s transferred across borders. Furthermore, their speedy transfer has resulted in their increasing use among developing country populations – the population there numbers over 1.4 billion!
While many governments have welcomed cryptocurrency, others remain wary and have imposed stringent regulatory frameworks. As a result, investors have moved their assets abroad in search of countries with fewer regulations, leading to an unstable race towards global stability.
To accelerate cryptocurrency adoption, stakeholders must engage in targeted awareness campaigns and build public trust through user-friendly applications and positive media coverage. Such measures will also educate consumers about both benefits and risks of cryptocurrency technologies so they can make more informed decisions regarding which currencies may best meet their individual needs and preferences.
Scalability Issues
Scalability issues in cryptocurrency can have a devastating effect on its adoption and sustainability. If transactions take too long to complete, consumers may forgo using them regularly for everyday purchases. Bitcoin’s blockchain network only processes limited numbers of transactions per second so to increase scalability they have adopted larger block sizes to increase scalability – however this strategy could increase centralization and reduce transparency.
To address these problems, many cryptocurrency platforms are exploring Layer 2 solutions such as off-chain transaction processing to manage more transactions without overstuffing the blockchain and prevent its usage from becoming overwhelmed. Such innovations may help overcome scalability issues that prevent wide adoption. In addition, more research should investigate behavioral and societal aspects that promote cryptocurrency adoption such as trust. Ideally, longitudinal data collection using an adapted questionnaire allows more accurate assessment of impacts over time.
Lack of Awareness
Cryptocurrencies are revolutionizing the global financial landscape by decreasing transaction costs and facilitating peer-to-peer transfers, yet remain relatively unpopular as general payment methods among consumers (Albayati et al. 2021). We utilize the Technology Acceptance Model (TAM) to better understand this lack of adoption, by looking at factors which influence awareness, acceptance and adoption.
By using partial least squares structural equation modeling, we discover that cryptocurrency awareness and adoption is heavily mediated by its perceived usefulness, ease of use and trust levels. Increased trust amplifies both factors’ effects on cryptocurrency adoption, providing valuable insights for financial institutions and tech developers seeking to speed up adoption of cryptocurrency technology. Specifically, understanding consumer perceptions as part of positioning new technologies effectively is central to their widespread uptake.
Lack of Trust
As the first digital money, cryptocurrencies hold great promise to change our financial system. Unfortunately, their launch was marred by security breaches and scams which undermined consumer trust in this technology. Transaction times also tend to be slower compared with credit card payments while cross-border payments may not be as efficient for lower value transactions.
To overcome barriers to cryptocurrency adoption, it is crucial to strengthen consumer awareness and trust. Aware consumers are more likely to perceive ease of use and usefulness of cryptocurrency, leading to its faster adoption. Our results from TAM indicate this clearly, showing increased crypto awareness significantly boosts perceived ease of use and usefulness mediated by trust – further evidence that trust plays an integral part in driving cryptocurrency adoption. Therefore, financial institutions, governments, and educational institutions should prioritize awareness initiatives targeted toward different demographic groups.
