Cryptocurrency awareness, acceptance, and adoption: the role of trust as a cornerstone

Cryptocurrencies, digital or virtual currencies secured by cryptography and blockchain technology, have significantly impacted the global economic landscape. Their decentralized nature, potential for faster transactions, and borderless capabilities offer alluring advantages. However, widespread adoption is hindered by misconceptions, lack of understanding, and security concerns. This study aims to explore the relationship between cryptocurrency awareness, acceptance (perceived ease of use and usefulness), and adoption, focusing on the moderating role of trust. The rapid growth of digital payments, projected to reach US$14.78 trillion by 2027, underscores the significance of understanding cryptocurrency's role in this evolving financial ecosystem. Addressing challenges like limited technological understanding, legislative constraints, and security concerns is crucial for promoting broader cryptocurrency adoption and potentially mitigating concerns about wealth inequality. This study uses the Technology Acceptance Model (TAM) as its theoretical framework, extending it by incorporating awareness and trust as key influencing factors. Awareness is expected to positively influence perceptions of ease of use and usefulness, while trust is hypothesized to strengthen the overall relationships between awareness, acceptance, and adoption. The study contributes theoretically by extending TAM to the cryptocurrency context and practically by offering insights to policymakers and institutions to promote informed adoption.

The study draws upon existing literature on the Technology Acceptance Model (TAM), highlighting its two core constructs: perceived ease of use (PEOU) and perceived usefulness (PU). PEOU refers to the perceived effortlessness of using a technology, while PU reflects the perceived benefits of its use. Numerous studies have established the significance of TAM in predicting technology adoption. The study also reviews literature on cryptocurrency, its decentralized nature, the challenges to its adoption, and its potential impact on global finance. It specifically considers studies examining the role of awareness, trust, and user perceptions in the adoption of new technologies, particularly in the financial sector. Existing research highlights the positive relationship between awareness and adoption, and the importance of ease of use and usefulness in shaping adoption intentions. Furthermore, the moderating role of trust is emphasized, with a focus on its impact on perceived ease of use and usefulness. The study notes the limited scholarly attention given to cryptocurrency as a medium of exchange, aiming to address this gap.

The study employed a quantitative research design using a survey-based approach. A questionnaire was developed, drawing upon existing scales from previous studies, to measure cryptocurrency awareness, perceived ease of use, perceived usefulness, trust, and adoption intention. The questionnaire used a five-point Likert scale. The target population was individuals aged 18-40 in Lahore, Pakistan, chosen for its mix of demographics and economic activity. The sampling method involved distributing 551 questionnaires, both physically and online, after screening for familiarity with digital tools and internet use. After accounting for missing data and outliers, 332 valid responses were used for analysis (60.2% response rate). The sample comprised a relatively balanced gender distribution (54% female, 46% male), with a majority aged 18-30 (71%) and a significant proportion holding bachelor's or master's degrees (80%). A majority were students (66%). Partial Least Squares Structural Equation Modeling (PLS-SEM) was used to test the hypotheses. The measurement model was assessed for reliability (Cronbach's alpha and composite reliability), convergent validity (average variance extracted), and discriminant validity (Fornell-Larcker criterion). The structural model assessed the direct, mediating, and moderating effects using bootstrapping.

The PLS-SEM analysis revealed several key findings. First, cryptocurrency awareness had a significant positive direct effect on cryptocurrency adoption (β = 0.192, p < 0.05), supporting H1. This indicates that greater awareness leads to higher adoption rates. Second, cryptocurrency awareness significantly and positively influenced both perceived ease of use (β = 0.470, p < 0.01) and perceived usefulness (β = 0.288, p < 0.001). Third, both perceived ease of use (β = 0.220, p < 0.01) and perceived usefulness (β = 0.134, p < 0.05) had significant positive effects on cryptocurrency adoption. Fourth, trust significantly and positively moderated the relationship between cryptocurrency awareness and both ease of use (β = 0.164, p < 0.05) and usefulness (β = 0.117, p < 0.05), supporting H4a and H4b. Increased trust amplified the positive effects of awareness on adoption through both ease of use and usefulness. Mediation analysis showed that ease of use (β = 0.103, p < 0.01) and usefulness (β = 0.038, p < 0.05) significantly mediated the relationship between cryptocurrency awareness and adoption, supporting H2 and H3. The R² values indicated that the model explained 51.5% of the variance in ease of use, 14.8% in usefulness, and 18.9% in adoption.

The findings support the hypotheses and extend the TAM by incorporating awareness and trust. The significant positive effect of awareness on adoption highlights the importance of educational initiatives to improve cryptocurrency understanding. The mediating roles of ease of use and usefulness underscore the need for user-friendly interfaces and clear communication of cryptocurrency benefits. The moderating effect of trust emphasizes the crucial role of building confidence and security in the cryptocurrency ecosystem. These findings align with existing research on technology adoption but provide specific insights into the cryptocurrency context. The study's focus on a relatively young and tech-savvy population in Lahore, Pakistan, suggests the findings may be generalizable to similar demographics in other developing countries with similar internet penetration and demographics.

This study makes significant contributions to both theory and practice. Theoretically, it extends the TAM model by incorporating awareness and trust, providing a more comprehensive understanding of cryptocurrency adoption. Practically, it provides valuable insights for policymakers, financial institutions, and developers to improve cryptocurrency awareness, ease of use, and trust, thereby fostering wider adoption. Future research could explore other factors influencing adoption, examine different demographics, and conduct longitudinal studies to track adoption patterns over time.

The study's limitations include the focus on a specific demographic (18-40 year olds in Lahore, Pakistan), which may limit the generalizability of findings. The cross-sectional nature of the study prevents causal inferences. Future research could address these limitations by exploring diverse demographics, geographic locations, and using longitudinal data collection methods. The study also focused on a specific set of variables and excluded other potentially relevant factors like government regulations and social influence, providing ample opportunity for future studies to expand the model.