The Extended TRA Model for the Assessment of Factors Driving Individuals’ Behavioral Intention to Use Cryptocurrency

Abstract

Aim/Purpose: The aim of this study was to explore the factors driving individuals’ behavioral intention to use cryptocurrency in Saudi Arabia using the extended TRA model. Background: Despite the great potential of cryptocurrencies and the exponential growth of cryptocurrency use throughout the world, scholarly research on this topic remained scarce. Whereas prior studies are mostly done in developed countries or specific cultural contexts, limiting the generalizability of their results, they mainly used technology adoption models that cannot fully explain the acceptance of new technology involved with financial transactions such as cryptocurrency and provided contradictory evidence. Entire regions have been excluded from the research on this topic, including Saudi Arabia which has a high potential to increase the volume of cryptocurrency use. Methodology: This study extends the theory of reasoned action (TRA) with the factors from technology adoption models that proved relevant for this topic, namely perceived usefulness, perceived enjoyment, perceived innovativeness, and perceived risk with three sub-factors: security, financial, and privacy risk. Data are collected using a quantitative research methodology from 181 respondents residing in Saudi Arabia and then analyzed by several methods, including exploratory factor analysis (EFA), confirmatory factor analysis (CFA), and structural equation modeling (SEM). Contribution: This study contributes to the scientific knowledge by extending the TRA model with a range of factors from the technology adoption field, thus enabling the analysis of this topic from human, financial, and technology perspectives and providing additional empirical evidence on the factors that previously either provided contradictory evidence or were not explored in this field. This research also provides the first empirical data on this topic in Saudi Arabia and enables further research on the topic and a comparison of the results. The study also contributes to practice by enhancing the actual understanding of the phenomena and providing valuable information and recommendations for governments, investors, merchants, developers, and the general population. Findings: The study found attitude, subjective norm, perceived usefulness, perceived enjoyment, personal innovativeness, privacy risk, and financial risk as significant predictors of the intention to use cryptocurrencies, whereas the influence of security risk was not found to be significant in Saudi Arabia. Recommendations for Practitioners: Using this study’s results, governments can create appropriate legal frameworks, developers can design fewer complex platforms, and merchants may create appropriate campaigns that emphasize the benefits of cryptocurrency use and transpire trust in cryptocurrency transactions by enhancing the factors with a positive impact, such as usefulness, enjoyment, and personal innovativeness while reducing concerns of potential users regarding the risky factors. By promoting a positive user experience, they can also improve attitudes and social norms towards cryptocurrencies, thus further stimulating the interest in their use. Recommendation for Researchers: As this study validated the influence of factors from technology, financial, and human-related fields, researchers may follow this approach to ensure a comprehensive analysis of this complex topic, especially as privacy risk was never examined in this context, while personal innovativeness, perceived enjoyment, financial, and security risk were explored in just a few studies. It is also recommended that researchers explore the impact of each part of subjective norms: social media, friends, and family, as well as how information on the benefits of cryptocurrencies affects the perception of the factors included. Impact on Society: Understanding the factors affecting cryptocurrency use can help utilize the full potential of cryptocurrencies, especially their benefits for developing countries reflected in safe, speedy, and low-cost financial transactions with no need for an intermediary. The research model of this study could also be used to investigate this topic in other contexts to discover similarities and differences, as well as to investigate other information systems. Future Research: Future studies should test this research model in similar and different contexts to determine whether its validity and study results depend on cultural and contextual factors. They can also include different or additional variables, or use mixed methods, as interviews would augment the comprehension of this topic. Future studies may also explore whether the impact of variables would remain the same if circumstances changed or use cases expanded, and how the preferences of the target population would change within a longitudinal time frame.