Bridging the Financial Gap: Factors Influencing Cryptocurrency Adoption in Pakistan

Abstract

This research examines the major determinants driving the adoption of cryptocurrency trading in Pakistan, with a focus on how behavioral intention towards crypto trading is influenced by factors such as awareness, ease of use, enjoyment, social influence, financial knowledge, and perceived risk. The study applies the Unified Theory of Acceptance and Use of Technology (UTAUT) because of its strong explanatory power in technology adoption, and was extended with four additional constructs (awareness, financial literacy, enjoyment, and risk) to better reflect Pakistan’s socio-economic context. SEM was applied to capture the complex relationships among these variables simultaneously. Data was collected via an online survey completed by 506 participants, and the hypotheses were tested using structural equation modeling (SEM). The analysis confirmed the significance of all proposed factors. Perceived enjoyment was the most influential in shaping behavioral intention, followed by awareness, ease of use (effort expectancy), social influence, financial literacy, and perceived risk. Unlike traditional UTAUT studies where perceived risk acts as a barrier, in this study it showed a positive and significant effect. This indicates that informed Pakistani users are willing to tolerate risks for potential benefits—an important contextual deviation from prior findings. This study contributes original empirical evidence regarding cryptocurrency adoption in Pakistan—an underexplored emerging market—and broadens the application of the UTAUT framework within this new context. The insights can assist stakeholders—including regulators, crypto service providers, and policymakers—in promoting adoption through improved education, user-friendly systems, and trust-building initiatives.