Examining the Influence of Regulatory Dynamics on Customer Behavioral Intentions towards Cryptocurrency Adoption in Sri Lanka

Abstract

The emergence of Bitcoin in 2009 marked a pivotal moment, generating widespread interest in cryptocurrencies as a decentralized alternative to traditional financial systems. Despite its innovative potential, questions surrounding the legitimacy and integrity of cryptocurrencies have cast doubts on their viability as financial instruments. The inherent volatility of Bitcoin, largely fueled by speculative investments, has further contributed to public skepticism. This study concentrates on Sri Lanka, a South Asian Island nation, where the legal treatment of cryptocurrencies remains uncertain. It aims to provide valuable insights for key stakeholders, including central banks, merchants, and cryptocurrency exchanges, by examining consumers’ inclination to use cryptocurrencies for transactions. This research, catering to potential cryptocurrency users, adopts the Unified Theory of Acceptance and Use of Technology (UTAUT) framework. A quantitative approach was employed in this study, involving the collection of 385 responses through the distribution of questionnaires. This was achieved through the application of simple linear regression and Pearson Correlation analyses. Snowball sampling was employed in the participant selection process, resulting in an interconnected group of users. The study findings reveal that performance expectations, effort expectations, social influence, and enabling factors exhibit a positive influence on the behavioral intention to use cryptocurrencies in Sri Lanka. Specifically, it was observed that effort expectations and facilitating conditions are the primary factors directly impacting behavioral intention in the Sri Lankan context. These results highlight the significance of perceived effort and the presence of favorable conditions as key drivers shaping individuals’ intentions to adopt cryptocurrencies in Sri Lanka.