Cryptocurrency Adoption Patterns and Financial Inclusion Outcomes in Emerging Market Economies

Abstract

This paper examines the connection between the use of cryptocurrencies and financial inclusion rates in emerging market economies. As more economies worldwide move towards the use of digital currencies, this paper discusses the potential of cryptocurrency adoption to promote financial access and inclusion, especially in economies that have low access to conventional banking products. The mixed-methods study was used, incorporating both quantitative methods of data analysis on the pattern of cryptocurrency use in 15 emerging economies and qualitative methods of interviews with financial specialists and adopters. The major statistical data indicate that the SEM Model achieved an  value of 0.88, which suggests that 88% of the variance in financial inclusivity could be attributed to the adoption of cryptocurrencies and other related factors, including technology infrastructure and regulatory environment. The R² value of the Regression Model was 0.85, indicating that economic and technological factors can explain 85% of the variance in cryptocurrency adoption. The analysis shows that there are also large regional differences, with the Latin American and Southeast Asian countries dominating the adoption curve, both because of the financial need and governmental promotion. This study indicates that although cryptocurrency use has the potential to promote financial inclusion, its achievement depends on favourable regulatory policies, increased digital literacy, and infrastructure advancement. The paper also has a conclusion that gives policy suggestions that can help advance cryptocurrency as a means of inclusivity in economies and governments, and financial institutions should adapt to this new reality to overcome the challenges of cryptocurrency.