Socio-cultural Enablers and Barriers to Cryptocurrency Adoption: An Institutional Theory Perspective From Pakistan

Abstract

This study examines the socio-cultural, religious, and environmental factors that both support and hinder the adoption of cryptocurrencies in Pakistan. Drawing on institutional theory, with particular attention to the cultural-cognitive pillar, it explores how collectivist norms, peer influence, and limited awareness shape individual behaviour. A qualitative case study approach was adopted, drawing on 23 semi-structured interviews with cryptocurrency traders selected via snowball sampling. Thematic analysis  revealed key patterns in motivations, regulatory understanding, risk perceptions, and environmental awareness. Results show that cryptocurrency adoption is driven by peer influence, social media exposure, and the pursuit of financial gain. However, adoption faces significant barriers, including limited technical knowledge of risks, poor understanding of legal and Sharīʿah compliance, and minimal awareness of environmental consequences. Financial literacy, trust in informal networks, and religious-cultural alignment play a central role in shaping behaviour in collectivist settings such as Pakistan. The study is limited to Pakistan and relies on self-reported data, which may be subject to  bias. Future research could examine cross-cultural or longitudinal perspectives. Insights from this research offer guidance to policymakers, religious scholars, and regulators seeking to develop culturally aligned frameworks and strengthen digital financial literacy. Targeted awareness campaigns are needed to promote ethical and sustainable cryptocurrency practices. The study highlights gaps in financial literacy, environmental awareness, and normative guidance, which need to be addressed to foster responsible innovation and broader financial inclusion in collectivist Muslim societies. This paper contributes by bringing together institutional theory with particular focus on socio-cultural dimension of cryptocurrency adoption, offering a  distinct perspective on digital finance in a non-Western, Islamic, collectivist context.