Assessment of Relationship Between Adoption of Cryptocurrency and Financial Stability among Low- and Middle-Income Earners in Gwagwalada Area Council, FCT, Nigeria

Abstract

Cryptocurrencies have emerged as decentralized digital financial instruments with the potential to enhance financial inclusion, particularly in developing economies. In Nigeria, evolving regulatory frameworks and growing digitalization have accelerated interest in cryptocurrency adoption, yet localized empirical evidence remains scarce. This study examines the assessment of relationship between adoption of cryptocurrency and financial stability among low- and middle-income earners in Gwagwalada Area Council, Federal Capital Territory, Abuja. The study specifically assesses the level of adoption, perceived financial benefits, associated challenges and risks, and the influence of cryptocurrency usage on savings patterns. Adopting a descriptive survey research design, quantitative data were collected from 250 respondents comprising traders, artisans, students, civil servants, and small-scale entrepreneurs. Data were analyzed using descriptive statistics and chisquare tests to test the stated hypotheses. The findings reveal a significant level of cryptocurrency adoption, with 58.8% of respondents reporting active use. Cryptocurrency adoption was perceived to enhance financial independence, reduce transaction costs, and facilitate faster payments. However, challenges such as price volatility, regulatory uncertainty, technical literacy gaps, fraud risks, and liquidity constraints were prominent. The study further finds that cryptocurrency adoption has influenced savings behavior, with many respondents using digital assets as alternative savings vehicles despite conversion difficulties. The study concludes that while cryptocurrency adoption promotes financial inclusion and autonomy among low- and middle-income earners, it simultaneously exposes users to substantial economic risks. The findings underscore the need for balanced regulatory frameworks, financial literacy initiatives, and infrastructural support to ensure that cryptocurrency adoption contributes sustainably to economic stability in semi-urban communities.