Original scientific paper
https://doi.org/10.62366/crebss.2024.1.004
The role of institutional quality and financial literacy in cryptocurrency adoption
Blanka Škrabić Perić
; University of Split, Faculty of Economics, Business and Tourism, Croatia
Ana Rimac Smiljanić
orcid.org/0000-0002-8720-2048
; University of Split, Faculty of Economics, Business and Tourism, Croatia
Ivana Mravak
orcid.org/0000-0003-1180-5990
; University of Split, Faculty of Economics, Business and Tourism, Croatia
*
* Corresponding author.
Abstract
This paper investigates the influence of institutional quality on crypto adoption in the country with regard to the level of financial literacy of country's population. The results show that in countries with lower financial literacy, institutions have a greater influence on cryptocurrency trading. Corruption control, government stability, socioeconomic conditions and quality of bureaucracy have a negative impact, while law and order, military involvement in politics and conflicts have a positive impact. On the other hand, in countries with higher financial literacy, the influence of institutions is less pronounced and mostly negative. The rise in the price of Bitcoin motivates the population to engage in cryptocurrency trading regardless of financial literacy. Furthermore, in countries with higher financial literacy, the growth of stock market turnover encourages stakeholders to include cryptocurrencies in their portfolios, while in countries with lower financial literacy, this relationship is negative. These results were further confirmed by the analysis of countries with regard to financial inclusion, which is often associated with financial literacy in the literature. Also, more recent data on financial literacy that have a sufficient number of countries for analysis are not available, therefore data from 2014 was used. In some further research, a new analysis could be carried out on newer data upon arrival or some other indicators could be taken into account, such as financial knowledge.
Keywords
crypto adoption; financial inclusion; financial literacy; institutions; panel data
Hrčak ID:
318526
URI
Publication date:
28.6.2024.
Visits: 55 *