A study on the challenges in accepting cryptocurrencies as a fiat currency

Abstract

This study looks at the challenges that at present are impeding cryptocurrencies from functioning as a fiat currency, in order to determine what needs to be changed to alleviate such issue. To fulfill this purpose, this study seeks to uncover factors which are deemed as significant by the public in order for them to consider using cryptocurrencies as a fiat currency. Further, the study seeks to identify whether such factors are significantly impacted by the different socio-economic and demographic groups. In conducting this study, the author examined ample literature, to understand better the notion of cryptocurrencies, risks associated with cryptocurrencies, and also challenges which currently are impeding cryptocurrencies from functioning as a fiat currency. From the literature, the author developed an online questionnaire with the intention of revealing factors that would ensure acceptance and adoption of cryptocurrencies as a fiat currency. The results from the study indicate that factors such as perceived ease of use, perceived usefulness, trust, facilitating conditions, perceived risk, security, and attitude were all found to be significant. These findings suggest that such factors are key determinants in influencing the public’s overall decision in accepting and adopting cryptocurrencies as a fiat currency. Furthermore, the author found that such factors are significantly impacted by different demographic groups mainly gender, completed level of education, and level of knowledge on cryptocurrencies. These findings call for remedial action by various relevant stakeholders, namely the government, regulators, financial institutions, and cryptocurrency firms to ensure that cryptocurrencies are adequately regulated to minimize as much as possible the risks and misuses associated with cryptocurrencies whilst at the same time advocating for innovative crypto projects to thrive and integrate in the economy. The author also recommends that people working in government agencies or in financial institutions to pursue relevant courses, seminars, and training sessions to increase their knowledge in relation to cryptocurrencies. The general public should also be encouraged to educate themselves on the area of cryptocurrencies. Furthermore, cryptocurrency firms should ensure to design their products and systems more securely and user friendly so that people are encouraged to use cryptocurrencies. Such entities should also ensure to remain fully compliant with the Anti-Money Laundering (AML) and Know-Your-Customer rules to reduce the risk of cryptocurrencies being used for illicit purposes.