Professor Coin: What's Driving Cryptocurrency Adoption Across the World – Decrypt

Professor Andrew Urquhart is Professor of Finance and Monetary Expertise and Head of the Division of Finance at Birmingham Enterprise Faculty (BBS).

That is the fifth instalment of the Professor Coin column, through which I carry essential insights from printed educational literature on cryptocurrencies to the Decrypt readership. On this article, we’ll examine cryptocurrency adoption.

Cryptocurrencies are clearly rising by way of measurement, scale and forms of choices, which altogether signifies the rising significance and affect they’ve on the standard monetary system.

They could have begun life being traded by solely a choose few laptop programmers, however for the reason that introduction of Bitcoin futures in 2017 and the following introduction of different by-product merchandise, culminating within the Bitcoin spot ETF launch in January 2024, extra buyers are taking discover of this revolutionary asset class.

On the core of the fourth industrial revolution is synthetic intelligence, data communication and expertise, the web of issues and blockchains—and PwC predicts that blockchains will enhance world GDP by $1.76 trillion by 2030.

China locations blockchain as certainly one of its high 5 priorities, whereas different nations, together with Germany, Japan, the UK and France, all see the potential advantages of over $50 billion. The elevated investor curiosity in current occasions might have modified the consumer base eternally, and this adoption might differ throughout industries, territories, regulatory domains and political realms. On this column, I examine what’s driving cryptocurrency adoption throughout the globe.

Some current work examines the connection between sure macro-national developmental indicators and cryptocurrency deployment throughout 137 nations, and curiously finds that the nations with greater training, human growth, democracy, regulatory high quality and gross home product (GDP) have greater adoption of cryptocurrencies.

Nonetheless, nations with much less financial freedom and extra corruption have skilled much less adoption, indicating that extra open and free nation states have skilled adoption. This means that it isn’t corrupt, uneducated states which are adopting cryptocurrencies, however extra open, democratic and free states.

Belief, however confirm

Now that we all know the financial and state variables have an effect on adoption throughout completely different territories, however what about belief? Belief is a social assemble and a perception, which fosters financial development, monetary growth and monetary inclusion.

Belief has fallen in current a long time—and as European Central Financial institution President Christine Lagarde remarked, “On this age of diminished belief, it’s the monetary sector that takes final place in opinion surveys.”

Work by Jalan et al (2023) helps the work by Bhimani et al (2022) in displaying that nations with greater belief ranges have the next curiosity in, and adoption of, cryptocurrencies, confirming the significance of belief within the development of monetary markets.

In a extra detailed examine, Saeedi and Al-Fattal (2025) discover which features of belief are essential for cryptocurrency adoption they usually discover that females place extra weight on regulation belief than males, whereas social belief is extra essential for older contributors.

DeFi adoption

What in regards to the distinction between the adoption of cryptocurrencies and decentralized finance (DeFi)? Current work by Nguyen and Nguyen (2024) suggests that prime cryptocurrency adoption can come up from the mix of excessive inhabitants, excessive inflation, low social connectedness, democracy, and uncertainty avoidance, whereas excessive human growth, excessive inhabitants, and excessive monetary growth appears to be the dominant configurations in explaining a rustic’s DeFi adoption.

However what impression does adoption, and several types of adoption, have on cryptocurrencies? Current work by Rzayev et al (2025) doc that early adopters of cryptocurrencies drive cryptocurrency returns and enhance worth effectivity, whereas late adopters contribute to noisier costs and efficiencies. Due to this fact, early adopters are key drivers for any cryptocurrencies.

Due to this fact, the tutorial literature means that adoption of cryptocurrencies varies extensively internationally, however there are key financial and state indicators that specify adoption. Additional, the kind of adoption impacts the efficiency of cryptocurrencies, indicating that not all consideration is created equally.

For extra data, see:

Bhimani, A., Hausken, Ok., Arif, S. (2022). Do nationwide growth components have an effect on cryptocurrency adoption? Technological Forecasting and Social Change, 181, 121739.

Jalan, A., Matkovskyy, R., Urquhart, A., Yarovaya, L. (2023). The function of interpersonal belief in cryptocurrency adoption. Journal of Worldwide Monetary Markets, Establishments and Cash, 83, 101715.

Nguyen, L. T. M., Nguyen, P. T. (2024). Determinants of cryptocurrency and decentralized finance adoption – A configurational exploration. Technological Forecasting and Social Likelihood, 201, 123244.

Rzayev, Ok., Sakkas, A., Urquhart, A. (2025). An adoption mannequin of cryptocurrencies. European Journal of Operational Analysis, 323, 253-266.

Saeedi, A., Al-Fattal, A. (2025). Analyzing belief in cryptocurrency funding: Insights type the structural equation modelling. Technological Forecasting and Social Change, 210, 123882.