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Economic and financial development as determinants of crypto adoption

Cosimo Magazzino, Tulia Gattone and Florian Horky

International Review of Financial Analysis, 2025, vol. 103, issue C

Abstract: This research investigates the macroeconomic determinants of crypto adoption, illuminating the potentials of cryptocurrencies to accelerate financial inclusion. By exploiting an extensive dataset from 165 countries between 2019 and 2021, this study employs various econometric methodologies, including Panel Feasible Generalized Least Squares (PFGLS), Robust Least Squares (RLS), and Quantile Regressions (QR). These classic econometric techniques are complemented by several machine learning techniques such as Bagging, Boosting, and Support Vector Machine (SVM) regressions, as well as Artificial Neural Networks (ANNs) and Naïve Bayes (NB) classification algorithms. The results show an interesting trend: cryptocurrency adoption is more prevalent in countries with robust financial markets and higher education levels. This suggests that crypto adoption is primarily a byproduct of sophisticated financial environments and an educated population, rather than a direct facilitator of financial inclusion.

Keywords: Cryptocurrency adoption; Financial inclusion; Economic development; Panel data; Machine learning (search for similar items in EconPapers)
JEL-codes: C33 C45 G15 I25 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:103:y:2025:i:c:s1057521925003047

DOI: 10.1016/j.irfa.2025.104217

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