The role of grievance redressal mechanisms and sociopsychological factors in fostering trust in cryptocurrency and investment behaviours

Abstract

This study develops a model for understanding the key contextual factors that will foster public trust in cryptocurrency and ultimately investment in it. Specifically, this study tests whether the regulatory factor of grievance redressal mechanism, the social factor of (mass)media influence and psychological factor of perceived integrity of crypto-asset merchants are essential to building public trust in cryptocurrencies and, in turn, willingness to invest. Primary data were collected to test the model using advanced regression analytics. We find that all the identified factors are positively associated with public trust that, in turn, positively predicts cryptocurrency investment intentions. Additional analysis reveals that trust plays an important mediating role. The originality and value of study lies in empirically providing evidence on the contextual and proximate antecedents of trust-building in cryptocurrency, which assists this digital currency ecosystem in designing strategies and interventions that should promote and sustain public interest and trust in the digital asset.