Does goodness of governance dissuade citizens from using cryptocurrencies?

Abstract

Cryptocurrencies are an increasing concern for national governments and international institutions. Anonymity, real-time transactions, together with the lack of intermediaries and control from financial and economic authorities make them appealing to criminals. Despite of the global efforts for standardizing the approach to cryptocurrencies, there are several risks identified and the way governments are facing them is not uniform. This paper analyzes the relation between goodness of governance and the use of cryptocurrencies on a sample of 33 countries. The results confirm that goodness of governance, by itself, dissuades people from holding and using cryptocurrencies. Additionally, our findings show that this effect relies on different governance factors, depending on how extended the use of cryptocurrencies is.