Abstract
This study seeks to uncover the macroeconomic and financial drivers of cryptocurrency adoption and usage from a global perspective. Utilizing data on cryptocurrency adoption from a diverse panel of 118 countries, we examine the empirical relevance of a wide set of intuitively plausible macro-financial variables in enabling cryptocurrency adoption. We identify decentralized finance(DeFi), inflation volatility, GDP per capita and security fragility as the key drivers of global cryptocurrency adoption, with DeFi having the largest impact. These results are robust to an instrumental variables analysis allowing for possible endogeneity of DeFi, as well as across alternative measures of inflation and GDP volatility. We also find significant income and regional heterogeneity in the adoption of cryptocurrency and discuss the policy implications of our findings.
| Original language | English |
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| Publication status | Published - 23 Mar 2024 |
| Event | 88th Annual Meetings of the Midwest Economics Association - Hyatt Centric Chicago Magnificent Mile, 633 N Saint Clair Street, Chicago, IL., Chicago, United States Duration: 22 Mar 2024 → 24 Mar 2024 https://mea.sites.grinnell.edu/ |
Conference
| Conference | 88th Annual Meetings of the Midwest Economics Association |
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| Abbreviated title | MEA |
| Place | United States |
| City | Chicago |
| Period | 22/03/24 → 24/03/24 |
| Internet address |
Research Keywords
- Cryptocurrency adoption
- decentralized finance (DeFi)
- blockchain
- financial inclusion
- instrumental variables.
