Policy Significance Statement
Adopting blockchain in European public sector organisations (PSOs) does not depend on a universal formula. Our findings show that adoption intensity tends to emerge from specific institutional combinations rather than from any single enabling condition. Regulatory clarity and access to European Union-level funding appear across the most consistent adoption paths, suggesting they serve as foundational enablers. Other conditions, such as national Research and Development investment or digital readiness, play a more variable role and may, in some contexts, be compensated by active innovation ecosystems or external funding schemes. This underscores the importance of flexible, context-aware policy strategies that recognise different entry points into innovation. Still, it is important to acknowledge that most European governments do not currently prioritise blockchain within their digital policy strategies. Although this study identifies institutional conditions that may support adoption where it occurs, it does not suggest that such adoption should be pursued universally. The findings highlight enabling conditions, but whether PSOs choose to adopt blockchain (and for what purpose) remains a matter of strategic relevance, not just institutional readiness.
1. Introduction
Blockchain is an emerging technology that has expanded beyond industries and reached the public sector. Scholars have already explored how this technology may facilitate various elements of public governance, namely service provision, policy-making, and internal administration, by bringing data integrity, efficiency, and transparency to administrations (Rikken et al., Reference Rikken, Janssen and Kwee2019; Upadhyay, Reference Upadhyay2020). The concrete adoption of blockchain technology in the public sector often begins with experimental trials or pilot projects, but these do not always result in sustained adoption or integration. Much blockchain testing in various public service areas has been reported worldwide, including education, healthcare, social security, and record management (Allessie and Sobolewski, Reference Allessie and Sobolewski2019; Clavin et al., Reference Clavin, Duan, Zhang, Janeja, Joshi, Yesha, Erickson and Li2020; Bosch et al., Reference Bosch, Tangi and Burian2022), but the number of active use cases remains relatively low (Rodriguez Müller et al., Reference Rodriguez Müller, Martin Bosch and Tangi2024; Tan, Reference Tan2026).
Research suggests low organisational adoption in the public sector can be attributed to security concerns, limited technological maturity, and a lack of organisational capacity (Upadhyay, Reference Upadhyay2020; Behfar and Crowcroft, Reference Behfar and Crowcroft2024). Moreover, rather than driving uniform organisational change, blockchain adoption leads to diverse and fragmented configurations shaped by conflicting technological, bureaucratic, and ethical logic, resisting convergence (Frolov, Reference Frolov2021). The stars of technological and organisational readiness must also be aligned with the broader institutional context (Tan et al., Reference Tan, Mahula and Crompvoets2022).
Scholars have identified institutional factors, such as regulatory uncertainty, limited government support, and stakeholder pressures, as barriers to blockchain adoption across sectors, such as supply chain, healthcare, and finance (Clohessy et al., Reference Clohessy, Acton and Rogers2019; Hartley et al., Reference Hartley, Sawaya and Dobrzykowski2022). The specific impact of these institutional factors on public sector adoption remains underexplored. A thorough examination of these institutional influences in the public sector context is warranted for several reasons.
First, public sector organisations (PSOs) themselves are seen as sources of institutional pressure that influence technology adoption (Oliveira and Martins, Reference Oliveira and Martins2011. Recent blockchain research has begun to explore institutional forces on blockchain adoption in the public sector, yet the specific role of PSOs in shaping this process is underexamined (Hartley et al., Reference Hartley, Sawaya and Dobrzykowski2022; Ansah et al., Reference Ansah, Voss, Asiama and Wuni2023).
Second, PSOs, too, operate within a framework of institutional rules, policies, and social norms, and face both horizontal pressures, such as peer influence from other organisations, and vertical pressures, including directives and expectations from higher authorities (Kiessling, Reference Kiessling2007; Zheng et al., Reference Zheng, Chen, Huang and Zhang2013; Bag et al., Reference Bag, Pretorius, Gupta and Dwivedi2021). Political stability, digital inclusion, or anti-corruption efforts may more broadly create a favourable environment for digital innovation (Astuti and Ayinde, Reference Astuti and Ayinde2025). However, they do not alone explain blockchain adoption in PSOs, highlighting the need to examine factors that reflect deliberate policy choices, such as funding, regulation, or ecosystem (ECO) coordination (Reddick et al., Reference Reddick, Cid and Ganapati2019).
Third, such a unique configuration is particularly interesting in the context of blockchain since, instead of producing uniform institutional change, blockchain adoption gives rise to heterogeneous assemblages shaped by conflicting logics—technological, bureaucratic, and ethical—that resist convergence and demand more nuanced theoretical tools (Frolov, Reference Frolov2021). As such, there is a growing call to reassess traditional technological innovation and adoption models, emphasising institutional conditions and coordinated policy environments that enable or constrain the uptake of blockchain and similar emerging technologies (Allen et al., Reference Allen, Berg, Markey-Towler, Novak and Potts2020).
Therefore, this study asks the following question: How do institutional factors affect blockchain adoption by public sector organisations? We answer this research question by exploring what (combinations of) factors may be essential for PSOs to adopt blockchain.
This study looks at adoption as the intensity of documented initiation or implementation of blockchain projects by public organisations in a particular country. While this does not fully capture the depth of integration, it reflects a meaningful step beyond experimentation. Prior research on public sector innovation similarly highlights the need to distinguish exploratory engagement from actual implementation (de Vries et al., Reference de Vries, Tummers and Bekkers2018).
European countries account for over 80% of reported global blockchain use cases and over 60% of use cases in the government (EU Blockchain Observatory and Forum, 2021). Europe is also a unique area because of its unified regulations and standards related to blockchain, including Markets in Crypto-Assets Regulation (MiCA) and General Data Protection Regulation (GDPR); the development of the world’s first cross-country blockchain service infrastructure (European Blockchain Service Infrastructure [EBSI]); and the governance of this infrastructure through the international organisation by the European countries (European Blockchain Partnership [EBP] and as a follow-up, a newly created legal entity EUROPEUM-EDIC) (Tan and Du Seuil, Reference Tan and Du Seuil2025). Nonetheless, despite the joint initiatives of European countries, their performance varies when looking at the distribution of use cases and maturity of their adoption: some countries were more actively involved in prototyping and testing technologies, while others were not.
Therefore, a comparative analysis among European countries allows us to control for supranational influences while providing a reliable testbed to assess the impact of country-level institutional factors on blockchain adoption in the public sector. Methodologically, we reviewed the literature to identify the institutional variables that may influence blockchain adoption in the public sector and tested these variables on the empirical data using qualitative comparative analysis (QCA). By comparing 21 European countries with 165 reported cases using the QCA methodology, we aim to better understand the most important institutional factors that condition the adoption of blockchain.
Our results underscore the importance of four institutional enablers in public sector blockchain adoption: regulatory frameworks (REGs), available funding, digital readiness, and ECO engagement. Rather than any single decisive factor, we identify multiple, context-specific combinations that shape adoption. Regulatory clarity and European Union (EU) funding for blockchain projects consistently appear in high-adoption configurations, suggesting their foundational role in explaining higher blockchain adoption. By highlighting the roles of coercive and normative pressures and showing how institutional conditions, such as funding and regulation, shape (and may be shaped by) governance choices around adoption and implementation, this study extends existing adoption theories and calls for sector-specific, context-aware models. While centred on European cases, the findings offer actionable insights for designing more targeted and effective adoption strategies.
We present the theoretical overview in Section 2. Section 3 outlines the methodology, relying on the QCA, with its main findings presented in Section 4. Section 5 discusses the findings and answers the research questions, with the article’s conclusions presented in Section 6.
2. Theoretical overview
2.1. Institutional factors
Institutional influence is central to understanding the adoption of new technologies (Alzadjali and Elbanna, Reference Alzadjali and Elbanna2020), particularly within structured environments, such as the public sector, because institutions—formal or informal, economic or political—establish the rules, resources, and networks that enable or constrain implementation.
Koppenjan and Groenewegen (Reference Koppenjan and Groenewegen2005) distinguish four levels of institutions within the socio-technological systems: actors and games, formal and informal arrangements, formal environment, and information environment (including social and cultural factors, legitimacy concerns, and social capital (Oliveira and Martins, Reference Oliveira and Martins2011). Institutional pressures on decision-making also often include various pressure types (DiMaggio and Powell, Reference DiMaggio and Powell1983). Mimetic pressures emerge when firms emulate competitors by adopting similar practices or innovations; coercive pressures consist of formal or informal forces exerted by other organisations upon which dependent organisations rely; and normative pressures arise from shared norms within networks, where exchanging information, rules, and norms fosters consensus. Organisations, tightly linked to their institutional environment, are motivated to comply with those pressures (Scott, Reference Scott2005).
The public sector is unique because its organisations are public-value-driven, generating pressures for other sectors, yet bound by their own rules and regulations (Kiessling, Reference Kiessling2007). In the public sector, institutional pressures concerning technology adoption may come from higher-tier governments, other public or private organisations, or citizens, including factors such as regulatory requirements, government initiatives, and the perceived success of other organisations (DiMaggio and Powell, Reference DiMaggio and Powell1983).
Research suggests a reciprocal relationship between institutional conditions and adoption (Astuti and Ayinde, Reference Astuti and Ayinde2025). The latter might also be sensitive to variations in the quality of institutions in different settings since each country has a unique set of institutions shaped by its history, economic structure, political environment, and societal values (Kiessling, Reference Kiessling2007). This diversity, driven by varying levels of financial infrastructure, political priorities, and economic goals, means that the institutional factors influencing blockchain adoption may differ in nature and impact. While many institutional factors drive technology adoption, their impacts can vary by country and sector. For example, in the context of artificial intelligence, Madan and Ashok (Reference Madan and Ashok2023) suggest that both vertical pressures (such as political environment, election cycles, policy signals, regulations, and national guidelines) and horizontal pressures (including intergovernmental competitive pressures, media scrutiny, citizen demands, and industry pressure) are influential in its adoption.
In this article, we focus on the institutional factors highlighted in the public sector technology adoption literature that are theoretically relevant and shaped by policy decisions made by public sector actors. Based on this reasoning and practical relevance, we take the following institutional variables to analyse further: (1) REG, (2) digital readiness, (3) blockchain ECO, and (4) financial provision. These factors represent critical institutional influence on technology adoption, encompassing legal boundaries, compliance requirements, targeted policy decisions, tailored interventions (1, 2, and 4), and collaborations, networks, and interdependencies that link various institutions (3). The following subsections will examine how each institutional factor influences European blockchain adoption.
2.2. Regulatory framework
Although blockchain can be seen as a means of regulation itself (i.e., the lex-cryptographia concept) (Wright and De Filippi, Reference Wright and De Filippi2015), its public sector use cases also necessitate robust REGs due to its novel nature (Jiang et al., Reference Jiang, Jakobsen, Bueie, Li and Haro2022). As part of coercive pressures, the regulations encompass how governmental policies, laws, and specific regulations restrict or facilitate blockchain’s implementation in a particular jurisdiction (Wibowo and Yazid, Reference Wibowo and Yazid2023). In blockchain research, a REG captures a variety of concepts, including regulations, standards, and implementation methods (Clavin et al., Reference Clavin, Duan, Zhang, Janeja, Joshi, Yesha, Erickson and Li2020; Malik et al., Reference Malik, Chadhar, Chetty and Vatanasakdakul2022; Cagigas et al., Reference Cagigas, Clifton, Diaz-Fuentes, Fernández-Gutiérrez and Harpes2023).
Regulatory certainty is crucial to blockchain for its safe and effective integration into existing legal and financial systems, as it helps to eliminate uncertainties related to data protection, compliance, and the overall legitimacy of blockchain-based operations in the public sector and beyond (More et al., Reference More, Sah and Singh2021). Moreover, regulatory support from the state has been identified as a crucial facilitator of blockchain adoption (Batubara et al., Reference Batubara, Ubacht and Janssen2018; Koster and Borgman, Reference Koster and Borgman2020).
A key area where regulators have been particularly active is oversight of virtual assets (VAs) and cryptocurrencies (Ellul et al., Reference Ellul, Galea, Ganado, Mccarthy and Pace2020; Yadav et al., Reference Yadav, Agrawal, Bhati, Al-Turjman and Mostarda2022). This space is especially relevant because these blockchain use cases operate across borders, involving significant financial transactions and introducing unique challenges in terms of legal accountability, consumer protection, and economic stability (Badmus, Reference Badmus2019; Ellul et al., Reference Ellul, Galea, Ganado, Mccarthy and Pace2020). While many public sector blockchain use cases focus on trust, verification, and transparency rather than virtual currencies, examining how countries regulate cryptocurrencies and VAs provides insights into their broader blockchain strategies.
European countries respond differently to the fast-paced crypto space: some have implemented specific internal regulations, while others continue to rely on existing financial laws. Despite regulatory differences concerning crypto-technologies, harmonised EU rules (European Commission, 2024) might influence the use and implementation of blockchain technologies. These regulations are on the GDPR, electronic identification and trust services (eIDAS), MiCAs, and the prevention of the use of the financial system for money laundering or terrorist financing (AMLD5).
In the European context, regulatory support is further reinforced by coordinated European initiatives. European Blockchain Regulatory Sandbox boosts regulatory dialogues to increase legal certainty for innovative blockchain technology solutions across the EU, where national regulators can participate (European Commission, 2023). The EU is also developing relevant standards concerning blockchain interoperability, decentralised platforms governance, a common identity framework, security, and smart contracts. Stakeholders include dedicated projects (e.g., Blockstand), supranational and industry organisations (INATBA, n.d.), and national and open standards bodies.
However, comprehensive regulations and universally accepted standards for all aspects of blockchain are yet to be established (Benson et al., Reference Benson, Adamyk, Chinnaswamy and Adamyk2024). Also, while these regulations provide a foundation, sector- and use-case-specific conditions often lead to varied interpretations in EU member states, preventing them from offering complete regulatory clarity for blockchain deployment. Much like global discussions on stablecoins and digital assets, EU regulations address key challenges but leave gaps, particularly regarding crypto assets not fully covered by MiCA. As a result, national-level regulations play a crucial role in filling these gaps, aligning blockchain adoption with specific regulatory needs and the diversity of crypto technologies. Therefore, regulatory clarity at the national level is expected to influence blockchain adoption significantly. Based on this, we formulate the following proposition:
P1: Countries with better clarity on regulatory conditions regarding blockchain and virtual assets have higher blockchain adoption in the public sector.
2.3. Digital readiness
We define digital readiness as a country’s institutional and infrastructural capacity to enable technological innovation. Digital readiness comes not only as a result of market forces or technological advancements but also as outcomes of public policies and government initiatives, thus acknowledging the institutional readiness to facilitate technological innovation by investing in networks and hardware (Gössling and Rutten, Reference Gössling and Rutten2007).
Technologically, blockchains are decentralised networks of nodes operating in a peer-to-peer fashion, initially suggesting their use for a new supporting infrastructure for governments (Ølnes et al., Reference Ølnes, Ubacht and Janssen2017). Over time, the perception of blockchain has evolved to view it as a complementary technology that can be integrated with existing systems to enhance efficiency (Sobolewski and Allessie, Reference Sobolewski and Allessie2021). Accordingly, the interoperability of blockchain platforms—both within and beyond organisational boundaries—is crucial since it ensures seamless integration and leverages the availability and sufficiency of current systems (Supriyadi et al., Reference Supriyadi, Sensuse and Sucahyo2021; Wibowo and Yazid, Reference Wibowo and Yazid2023). The emphasis on interoperability aligns with the broader importance of technical infrastructure, which has been recognised as a critical enabler for adopting other technologies, including big data (Baig et al., Reference Baig, Shuib and Yadegaridehkordi2019) and artificial intelligence (Madan and Ashok, Reference Madan and Ashok2023; Chen et al., Reference Chen, Gascó-Hernandez and Esteve2024).
In blockchain research, factors concerning overall digital connectivity, that is, use of mobile payments, data quality, and internet coverage, are often mentioned as facilitating blockchain adoption (More et al., Reference More, Sah and Singh2021; Setyowati et al., Reference Setyowati, Utami, Saragih and Hendrawan2023). Although many efforts are put at the pan-European level—including various policies and funding programmes—to boost digital development in European countries, reports show that European countries vary significantly in their technological landscape. Therefore, we make the following proposition:
P2: Countries with higher public sector digital readiness have higher adoption of blockchain in the public sector.
2.4. Blockchain ecosystem
For blockchain, a collaborative network of stakeholders, including industry leaders, businesses, and research institutions, is involved, which we call a “blockchain ecosystem.” The relevance of this ECO is underscored in related research (Negash, Reference Negash2022). In supply chains, shared testing reduces the uncertainty of adoption among stakeholders (Hartley et al., Reference Hartley, Sawaya and Dobrzykowski2022). Blockchain’s distinct feature, multi-stakeholderism both in the implementation and in use (More et al., Reference More, Sah and Singh2021; Rainero and Modarelli, Reference Rainero and Modarelli2021), and the readiness of the stakeholders (Akaba et al., Reference Akaba, Norta, Udokwu and Draheim2020; Ding et al., Reference Ding, Hu, Dai and Wang2023), and of the whole ECO as a whole (Toufaily et al., Reference Toufaily, Zalan and Dhaou2021; Negash, Reference Negash2022), are seen as necessary for successful implementation.
Accordingly, PSOs’ innovation and technology adoption are never isolated from the external environment. PSOs, driven to serve the public good and create public value, are also subject to both vertical pressures from higher-level government organisations and horizontal pressures from other PSOs and the industry. Both pressures have been acknowledged as crucial for blockchain adoption (Jiang et al., Reference Jiang, Jakobsen, Bueie, Li and Haro2022; Alston et al., Reference Alston, Murtazashvili and Weiss2024). In terms of vertical pressures, the role of a (central) government’s support (Xia et al., Reference Xia, Xie, Lin and He2022; Ding et al., Reference Ding, Hu, Dai and Wang2023) and initiative (Clavin et al., Reference Clavin, Duan, Zhang, Janeja, Joshi, Yesha, Erickson and Li2020; Kostrikova, Reference Kostrikova2021) are seen as positive forces, although unsuitable socioeconomic indicators can restrict adoption despite governmental efforts (Akaba et al., Reference Akaba, Norta, Udokwu and Draheim2020; Jiang et al., Reference Jiang, Jakobsen, Bueie, Li and Haro2022).
This underscores the importance of accounting for horizontal pressures, such as ECO readiness and the role of specialised associations, which complement vertical pressures by fostering a supportive environment for technology adoption across organisations and sectors. External factors often outweigh organisational or technological ones, suggesting that organisations’ low blockchain adoption rate is mainly due to insufficient ECO readiness (Lustenberger et al., Reference Lustenberger, Malešević and Spychiger2021).
In blockchain ECOs, stakeholders collaborate to develop practical blockchain applications. The ECO variable can proxy for horizontal pressures, capturing the size and influence of specialised associations and collaborative networks. While such pressures vary across countries, the prominence of these organisations offers a measurable, if imperfect, indicator of their intensity.
Therefore, we propose the following proposition:
P3: Countries with more developed blockchain ecosystems have higher public sector adoption.
2.5. Financial provision
The strategic allocation of resources towards innovative technologies often depends on targeted policies and institutional priorities rather than overall economic performance (Gössling and Rutten, Reference Gössling and Rutten2007). Studies show the crucial role of costs associated with blockchain adoption, specifically contributing to the deployment (Clavin et al., Reference Clavin, Duan, Zhang, Janeja, Joshi, Yesha, Erickson and Li2020; Jiang et al., Reference Jiang, Jakobsen, Bueie, Li and Haro2022) and the maintenance of blockchain-based systems (More et al., Reference More, Sah and Singh2021). In blockchain use-cases development, important considerations also include the cost-effectiveness of blockchain innovation (Alston et al., Reference Alston, Murtazashvili and Weiss2024) and the present budgetary limitations within public administrations.
While generic economic indicators, such as the gross domestic product (GDP) per capita, may measure a state’s financial well-being, they do not necessarily reflect the institutional priorities and the strategic allocation of resources to emerging technologies projects, like blockchain (Xia et al., Reference Xia, Xie, Lin and He2022). National governments are responsible for the internal financing of digital innovations, and the pan-European funding programme also exists to boost innovation in the EU, including testing emerging technologies like blockchain. Therefore, our proposition is as follows:
P4: Countries with more available funding for blockchain innovation have higher public-sector blockchain adoption
3. Methodology
3.1. Method overview
We use a QCA methodology with a fuzzy set to test our propositions and identify how various combinations of the identified institutional factors impact blockchain adoption in European countries. This method has been used in other technological contexts (Veríssimo, Reference Veríssimo2016; Zhang et al., Reference Zhang, Wang and Liang2021) and blockchain research (De Oliveira et al., Reference De Oliveira, Zanoni, Dalla-Rosa and Verschoore2021; Wamba et al., Reference Wamba, Wamba-Taguimdje, Lu and Queiroz2024).
Previous studies have looked at how certain factors (e.g., cybersecurity, government effectiveness, and political stability) may positively predict “blockchain adoption” for early pilots (on a binary scale) (Reddick et al., Reference Reddick, Cid and Ganapati2019). This study moves beyond that by capturing variation in adoption intensity and analysing how combinations of conditions shape adoption across institutional contexts.
The European member states have various adoption experiences, although all have committed to building a blockchain infrastructure for public services through the EBP. QCA reveals the multiple pathways through which these factors collectively influence reported use. Given the dynamic nature of the blockchain industry, all the data collected for this study is a snapshot of the data available during data collection, taking place between March and July 2024.
3.2. Dependent variables
The tested data come from an open-access dataset collected by the Public Sector Tech Watch team (PSTW) of the European Commission’s Joint Research Centre. This is the most comprehensive overview of emerging technologies’ use cases in the public sector (Tangi et al., Reference Tangi, Combetto and Martin Bosch2024), showcasing blockchain use cases across European countries. The PSTW dataset includes cases initiated by national, regional, or local authorities or those entities directly financed and administered by them, but not having an industrial or commercial character (Tangi et al., Reference Tangi, Combetto and Martin Bosch2024).
The initial dataset consisted of 27 EU member states, and we include Norway (an EBP member) and Switzerland, countries with economic and legal connections to the EU and a robust blockchain ECO. We range their reported use cases per capita as our dependent variable (or outcome in the QCA terminology) to ensure a fair cross-country comparison through the relative intensity of blockchain adoption, independent of population size, thus reflecting not only the presence of blockchain activity but also the extent to which such initiatives are being taken up within countries. Including the absence of the outcome (countries with zero reported cases) is also considered good practice in the QCA research (Veríssimo, Reference Veríssimo2016).
Furthermore, after inspecting the data, one statistical and institutional outlier country (Malta) has been removed from further analysis due to its extreme value of cases per capita (116.60), nearly twice that of the next-highest country. While small countries typically yield more per-capita scores for a few reported cases, Malta’s unique blockchain activity is also influenced by its targeted national strategy (KPMG, 2020). The final dataset is presented in Annexe A (Supplementary Material).
3.3. Independent variables
3.3.1. Regulatory framework
Although the EU provides an overarching REGs, such as GDPR and MiCA, legal certainty still varies considerably nationally. To assess how countries regulate the blockchain space, we look at their approaches to regulating cryptocurrencies and VAs. Effective regulation of digital assets can create a foundational framework that supports broader blockchain integration across various sectors (Demertzis and Wolff, Reference Demertzis and Wolff2018).
For instance, suitable indicators are available for assessing the implementation of the recommendations regarding VAs and VA service providers (VASPs) by the Financial Action Task Force’s (FATF, 2024). Based on seven indicators, this recommendation aims to prevent the misuse of digital assets for illegal activities, such as money laundering and terrorist financing. In our analysis, two metrics had the same value for all studied countries. Hence, the five remaining milestone metrics were used, including (1) risk assessments covering VAs and VASPs, (2) VASPs registration or licensing in practice, (3) supervisory inspections or inclusion of VASPs in current inspection plans, (4) enforcement actions or other supervisory actions against VASPs, and (5) the travel rule for VASPs. Countries reported scores as “yes,” “no,” or “in progress” for each indicator, and we assigned scores of 1, 0, and 0.5, respectively, for our analysis and calculated their total score.
3.3.2. Digital readiness
The Digital Economy and Society Index (DESI) is an aggregate indicator of infrastructural and institutional capacity relevant to the uptake of high-tech technologies, such as blockchain (DESI, 2019). It assesses countries based on several merits, including technical infrastructure, digital competencies, and overall digital efficacy (Russo, Reference Russo, Sánchez-Serrano, Maturo and Hošková-Mayerová2020). These factors, available for all 27 EU countries, comprehensively assess countries’ digital capabilities.
To predict their DESI scores for Norway and Switzerland, we performed a linear regression (Cai and Hall, Reference Cai and Hall2006) using the 2022 UN E-Gov benchmarking scores, another comprehensive tool to explore countries’ overall digital development, based on the scores of all studied countries (United Nations, 2022). Thus, we calculated the slope (618.57) and intercept (−323.930) of the linear relationship between UN-EGOV and DESI, resulting in the equation of DESI = 618.57*EGOV-323.93, which was then used to estimate the missing values based on their respective EGOV scores. Using these parameters, we estimated the DESI scores for Norway and Switzerland to be 225.30 and 217.44, respectively.
3.3.3. Blockchain ecosystem
When assessing the ECO of the technology adoption, essential aspects are (i) a big enough size of the ECO to create a noticeable benefit of blockchain, and (ii) at least one active stakeholder in this ECO putting pressure on others (Lustenberger et al., Reference Lustenberger, Malešević and Spychiger2021). When looking at blockchain development in the studied countries, each country had an active central player, a so-called “national blockchain association.”
Then, through desk research, we searched for stakeholders listed as partners or collaborators within the blockchain coalitions, including companies and start-ups from various industries, other organisations, consultancies, and banks actively developing blockchain technology in multiple capacities. This was done by looking at publicly available literature, including project websites, EU and national databases, and organisational press releases. Where available, the respective national blockchain association has already provided the ECO size estimate data, for example, listing all participating stakeholders. Alternatively, we manually counted the stakeholders. Although the lack of standardised reporting limited the comprehensiveness of our analysis, this approach allowed us to reconstruct ECOs with cross-country consistency.
3.3.4. Financial provision
Given the peculiar circumstances of innovation funding in European countries, blockchain project financing primarily comes from two sources: national budgets allocated by governments through research and development (R&D) and funding programs provided by the EU. First, we took the Eurostat data on average R&D budgets per capita in each country spent in the governmental sector between 2016 and 2022 (Eurostat, 2025). Then, we took the amount of funds allocated to stakeholders from each country through blockchain-related projects under various EU funding (EUF) programmes during the same period (European Commission, 2022). In both instances, the data were available for all analysed countries.
3.4. Data analysis
All the variables are presented in Annexe B (Supplementary Material), along with each variable’s conceptualisation and data source. Some independent variables (ECO and both types of funding) were expressed per capita to ensure comparability across cases.
The QCA methodology operates within the 0 to 1 scale, where 0 stands for “fully out” and 1 for “fully in” membership (Ragin, Reference Ragin2000; Fiss, Reference Fiss2011). There are no theoretically established thresholds for blockchain adoption intensity, so the outcome variable was calibrated against empirically derived anchors using the fuzzy-set QCA (fsQCA) software. We used the 5–95 percentile points for full non-membership and memberships, with (0) and (~3.63), respectively, and median point (~0.36) as the crossover, reflecting the very skewed distribution of adoption rates in our data, with most countries experiencing low adoption and a small minority of countries with comparatively high adoption (Pappas and Woodside, Reference Pappas and Woodside2021). While a low per capita adoption rate is not a sign of underdevelopment in technological terms, it does signify a relatively weaker standing within the group of high adopters.
First, we conducted a “necessity analysis” to determine whether each institutional factor is necessary for achieving higher blockchain adoption in the studied countries and to identify which of our propositions has a stronger correlation. In this analysis, consistency and coverage are metrics for assessing the fsQCA’s robustness. Consistency measures how reliably the presence of causal conditions leads to the outcome, with a score above 0.75 considered acceptable, though scores closer to 0.9 or higher are preferred (Schneider and Wagemann, Reference Schneider and Wagemann2012; Elliott, Reference Elliott2013). Through coverage, we can evaluate to what extent a variable or configurations explain the outcome’s occurrences and assess the causal paths’ empirical relevance and explanatory depth (Ragin, Reference Ragin2000). While higher coverage values indicate broader explanatory power, even lower coverage values can be significant, especially when multiple causal paths are involved. Here, the EUF and local R&D budgets (R&D funding [RDF]) variables were tested individually and in pairs.
Then, we performed a series of condition analyses, where each of the seven tests examined how the presence or absence of some of our tested factors affected the explanatory power of the resulting configurations. By systematically omitting one or more variables in fsQCA tests, we probed the sensitivity of solution paths and ascertained which conditions were context-specific versus always affecting. For that, we generated a “truth table” capturing all possible combinations of causal conditions from our dataset through a series of tests, minimised using standard fsQCA protocols (Quine-McCluskey algorithm to identify the most relevant configurations). We then analysed specific combinations of conditions for each path illustrated by the countries matching the path, with consistency values indicating their reliability and raw and unique coverage, highlighting the proportion of cases explained and the distinct contribution of each path.
4. Results
4.1. Necessary conditions analysis
The REG variable achieved a suggested consistency threshold of 0.9 (Ragin, Reference Ragin2000; Schneider and Wagemann, Reference Schneider and Wagemann2012). This suggests that countries with higher adoption rates have better VA regulation. The EUF for blockchain projects (0.70) and local R&D budgets (0.88) do not qualify as necessary conditions individually. However, when tested together, their consistency meets the threshold (0.947), suggesting that in nearly 95% of the cases with the outcome, at least one of these two forms of funding is present. Furthermore, modest coverage (0.64–0.78) across all tested propositions indicates that no single condition accounts for all instances of adoption: even widely present factors leave several cases unexplained, underscoring the partial explanatory power of each pathway (Table 1).
Necessary conditions analysis
Source: Author’s own work.
4.2. Conditions analysis
4.2.1. Factor analysis
We performed seven iterations of fsQCA analysis, leaving out one or several conditions to investigate how sets of variables influence the blockchain adoption intensity, how consistently a configuration produces the outcome, and to what degree it explains the cases. This multi-level approach accounts for which conditions are contextually redundant or necessary across model specifications and for diversity in how the variables themselves must be interpreted. Notably, whereas indicators such as financial provision (RDF and EUF) and digital readiness (TEC) are based on standardised, publicly available data, variables like regulatory clarity (REG) and ECO are more interpretive and rely on manual data collection.
Each test has solution-level scores but also separate paths (with a total of 25 unique configurations), each with its own consistency and coverage. Interestingly, including regulatory clarity (REG) in the test significantly increases the coverage but slightly reduces consistency. In turn, EUF emerges consistently as crucial, positively influencing paths’ consistency and coverage. Digital readiness (TEC) and ECO factors are complementary, highlighting configurational flexibility where their presence jointly strengthens adoption but does not appear strictly necessary individually. A summary of the tests performed and detailed results of each test can be found in Annexes C and D (Supplementary Material).
Next, the table below presents the paths with the strongest consistencies (above 0.9), with the duplicate paths merged (Table 2).
Paths meeting the consistency threshold
Source: Authors’ own elaboration.
The EUF/regulatory clarity combination (EUF*REG) appears in 8/9 of the most consistent paths, suggesting that these are core enablers for higher blockchain adoption. However, as a standalone path (5b), they show a relatively low unique coverage (0.031), suggesting that more complex paths (e.g., 3e or 3c), incorporating additional conditions, are stronger in explaining the blockchain adoption intensity of our dataset.
We can also observe configurational flexibility regarding the conditions of digital readiness and R&D funding. Specifically, paths such as 3c (EUF*REG*ECO* ~ RDF) and 1a (EUF*REG* ~ TEC) demonstrate that neither the presence of RDF nor the presence of digital readiness (TEC) is strictly necessary for achieving higher blockchain adoption intensity. Instead, their absence may be compensated by EUF, regulatory clarity (REG), and active ecosystem engagement (ECO), confirming a substitutive relationship among these conditions.
Comparing all tests, simpler models (e.g., tests 4 and 6) achieved higher consistency despite none of their related paths exceeding the 0.9 threshold, indicating that fewer variables are likely to reliably explain blockchain adoption intensity in the studied countries, albeit with reduced case coverage. This suggests that no single path explains adoption independently; instead, the solution’s strength lies in the combined effect of multiple moderately sufficient paths. This reflects the fragmented, context-sensitive nature of early-stage blockchain adoption and underscores the value of parsimony when dominant institutional logic is still emerging.
4.2.2. Country-level analysis
At the country level analysis, summarised in Table 3, countries participating in the paths meeting the consistency threshold are presented. Estonia, Luxembourg, Switzerland, and Austria appeared across multiple high-consistency paths, possibly suggesting that their institutional arrangements were likely more suitable for blockchain use cases to emerge. Cyprus and Italy are both present in paths where blockchain funding from the EU and stronger VA regulations could compensate for their lower digital readiness scores. In turn, Denmark demonstrates how good domestic conditions (REG, TEC, and ECO) might drive adoption independently of EUF. Finland, Belgium, and Spain demonstrate how restricted national R&D funding might be made up by other drivers (EUF, REG, and ECO).
Countries’ participation in generated paths
Source: Authors’ own elaboration.
Conversely, although Greece, Romania, and Norway had few reported blockchain instances, they did not appear on any of the adoption paths generated. This likely suggests that isolated blockchain pilots are unlikely to translate into wider adoption when not embedded in a larger enabling institutional environment. Finally, despite its relatively high adoption intensity, the Netherlands appears only in lower-consistency paths. This may point to distinct institutional dynamics, reinforcing the need to account for country-specific factors even among high-performing cases.
5. Discussion
Not all institutions and factors have the same impact (Alzadjali and Elbanna, Reference Alzadjali and Elbanna2020). In this study, we identified and tested four institutional factors and how they influence blockchain adoption intensity in European countries. By operationalising adoption as a calibrated outcome based on reported use cases’ intensity per capita, this study moves beyond binary adoption value and reflects on how extensively blockchain has been taken up across European public sector ECOs. Our findings underscore the configurational role of institutional factors, showing that adoption is shaped not by single variables but by specific combinations.
5.1. Policy implications
The absolute and relative numbers of reported blockchain use cases vary across Europe, suggesting that Brussels-driven policies alone are unlikely to facilitate mass adoption of blockchain in EuropeanPSOs. Broadly, our results indicate that blockchain projects are more likely to succeed in dynamic, well-regulated environments with sufficient infrastructure and resources.
Various combinations of factors might equally lead to higher adoption rates, that is, there is no single “recipe” for blockchain adoption. In our “regulations” variable, we examined the regulations governing VAs (Luthra et al., Reference Luthra, Janssen, Rana, Yadav and Dwivedi2023). Although only some blockchain projects involve VAs or cryptocurrencies, a strong correlation exists between VAs/VASPs regulations and blockchain adoption, suggesting that crypto-space developments should be considered. The EU will likely play a central role in harmonising blockchain-related regulations and technical standards, particularly through initiatives like the EBSI.
A leaner adoption path (5b) has the highest (though not unique) coverage, suggesting that countries with limited R&D or digital readiness can still adopt blockchain when supported by favourable regulations and EUF. As EU-funded projects often involve cross-border collaboration, the EUF variable, rather than direct national investment, reflects a country’s ability to access and integrate within EU digital innovation networks.
An unsuitable socioeconomic situation may limit blockchain’s uptake (Akaba et al., Reference Akaba, Norta, Udokwu and Draheim2020; Jiang et al., Reference Jiang, Jakobsen, Bueie, Li and Haro2022). Moreover, blockchain’s multi-stakeholder, cross-expertise, and cross-border nature underscores its role as a collaborative tool rather than a mere technology (Lustenberger et al., Reference Lustenberger, Malešević and Spychiger2021). An active blockchain ECO appears to be an important, if not decisive, enabler of adoption, potentially compensating for limited national resources. Policymakers should treat ECO-building as a strategic tool, not just outreach. Initiatives like the EBP can enhance legitimacy and trigger adoption through network effects.
Furthermore, we still highlight the importance of various resources necessary for implementing blockchain use cases (Xia et al., Reference Xia, Xie, Lin and He2022). While the EUF is often present in cases with high outcome values, variables such as local RDF and digital readiness (TEC) are notably absent from several high-consistency adoption paths, likely suggesting that investing in broad digital maturity or generic funding programmes does not, on its own, ensure blockchain adoption. Alternatively, a rather small scale of reported use cases may indicate that large resources are not necessary for experimenting.
All in all, to continue making informed choices, instead of seeking “best practices” replication, European policymakers should explore how existing strengths in countries (e.g., stronger digital readiness or more profound regulation) can compensate for weaker areas (e.g., limited resources). Policymakers should also assess whether blockchain use cases are genuinely connected to implementation needs rather than promoting adoption for its own sake. As such, adoption dynamics are unlikely to be uniform across all public sectors: the institutional factors enabling innovation in central government may differ from those in local authorities or state-owned enterprises. Innovation investments should be strategically aligned with the political, administrative, and technical realities in which blockchain is expected to operate.
Government initiatives and support are essential in blockchain adoption (Kostrikova, Reference Kostrikova2021). While European countries have adopted individual policy strategies for artificial intelligence (AI), another mainstream technology (Madan and Ashok, Reference Madan and Ashok2023), most do not have such strategies for blockchain; it is not yet majorly ingrained in the European policy agenda. In this regard, although our findings elucidate certain conditions likely to lead to a higher intensity of blockchain adoption, the overall relevance of future policies towards wider blockchain adoption in European countries is not immediately warranted. The distinction matters between whether public sector blockchain is under-adopted because governments cannot adopt it or because, by and large, they choose not to. Our analysis shows what conditions likely enable adoption when it does occur, but it does not presume that adoption should occur universally.
Therefore, rather than viewing limited adoption as a failure to scale blockchain in the public sector, future research and policy efforts might better focus on identifying where blockchain offers public value, in specific domains, under specific constraints, or for problems not addressed by existing solutions.
5.2. Theoretical discussion
This section connects our findings to adoption literature, extending it through an institutional lens. Commonly used heuristics for exploring technology adoption factors (including the works of Rogers’ diffusion of innovation and Tornatsky and Fleischer’s technology-organisation-environment frameworks [Tornatsky and Fleischer, Reference Tornatsky and Fleischer1990]) emphasise the role of innovation characteristics, organisational capabilities, and contextual pressures. Some institutional dimensions are also reflected there: for example, perceptions of compatibility and complexity of technology are shaped by legal and bureaucratic frameworks, while trialability often depends on policy initiatives and access to funding (Rogers, Reference Rogers2003). However, these models treat institutional conditions as discrete, static influences rather than examining how they interact, compensate for one another, or operate differently across national contexts. Such approaches may be particularly limiting when applied to emerging technologies like blockchain, where adoption often depends on complex institutional arrangements. The nature of blockchain adoption suggests that tailored interventions are crucial, as they must be adapted to the specific conditions and environment for adoption (Alzadjali and Elbanna, Reference Alzadjali and Elbanna2020).
We show that no single factor alone explains public sector blockchain adoption; instead, it results from varying combinations of legal, financial, technological, and ECO-related enablers. Some countries, like Italy or Finland, follow lean paths, while others, such as Luxembourg or Estonia, align with multiple complex configurations. This diversity suggests that adoption follows context-specific, path-dependent logic, with cases like the Netherlands pointing to less conventional trajectories.
Financial provision and digital readiness can be seen as possible outcomes of specialised policies in blockchain adoption (Baldacci and Frade, Reference Baldacci and Frade2021; Setyowati et al., Reference Setyowati, Utami, Saragih and Hendrawan2023). Coercively, digital readiness may signal external policy pressures or alignment with EU digital agendas (Wamba et al., Reference Wamba, Wamba-Taguimdje, Lu and Queiroz2024); normatively, it may reflect citizen or stakeholder expectations that public organisations keep pace with digital innovation (Scott, Reference Scott2005) and create public value. We note that neither a higher digital readiness nor sheer R&D budgets alone guarantee blockchain adoption, reaffirming that technological determinism is likely ineffective and adoption should not be a goal in itself.
Prior studies show that large economies and advanced infrastructure are not always predictors of adoption (Reddick et al., Reference Reddick, Cid and Ganapati2019). Focusing on more policy outcomes than static metrics like GDP, our findings partially align with this stance. In several high-consistency configurations (e.g., 1d/7c, 3c, 1a, and 5b), blockchain adoption appears even where domestic R&D funding or digital readiness are limited, also possibly reflecting the nature of blockchain adoption itself: frequently limited to experimental or small-scale initiatives that do not demand full integration with national systems. This suggests that institutional alignment, rather than resource availability alone, can compensate for constraints, inviting further dialogue with theories of bounded rationality (Jones, Reference Jones1999) and resource dependence (Hillman et al., Reference Hillman, Withers and Collins2009). However, integrating blockchain into PSOs might entail infrastructural changes and sustained financial commitments in the long term—a subject for future studies.
Also, unclear regulations (on blockchain/crypto regulations in our case) may act as a source of uncertainty, influencing decisions in ways that lead organisations to settle for suboptimal solutions (Jones, Reference Jones1999). Our results align, as the core pair of conditions (REG*EUF) suggests that blockchain adoption in the public sector is less a function of isolated technological capacity and more the result of institutional settings, where regulatory clarity and the EUF jointly create the conditions for experimentation and legitimacy of blockchain innovation.
Furthermore, 70% of blockchain ECOs reportedly originated from one organisation’s drive (Rauchs et al., Reference Rauchs, Blandin, Bear and McKeon2019). This aligns with the discussion of horizontal pressures, where the influence of external networks and industry leaders can drive adoption, complementing vertical pressures from government or regulatory authorities to create a more supportive environment for blockchain implementation (Lustenberger et al., Reference Lustenberger, Malešević and Spychiger2021). Neo-institutional theory also suggests organisations follow others to engage with new technologies (Scott, Reference Scott2005). Through mimetic pressures, amplified by hype (rather than competition) and experimental funding, external stakeholders would likely impose the adoption of blockchain on another PSO since the nature of a blockchain as network technology demands that many organisations join the network to grasp its full potential. However, such pressures are not yet widely studied because just a few successful post-pilot implementations exist (Hartley et al., Reference Hartley, Sawaya and Dobrzykowski2022). Merely capturing the size of the ECO is not sufficient for generalisable conclusions, and the actual influence of other organisations can only be measured via qualitative observational studies analysing these ECOs in-depth, as such pressures are difficult to capture due to limited implementation (Hartley et al., Reference Hartley, Sawaya and Dobrzykowski2022).
While regulatory clarity reflects top-down influence, EUF occupies a hybrid space, shaped by supranational policy but dependent on national-level initiative and capacity. These dynamics underscore the need to consider institutional conditions in isolation but across levels of governance. Furthermore, although internal organisational factors (e.g., leadership or digital capacity) were not modelled directly, they likely interact with institutional conditions, for example, by influencing access to funding or compensating for weak ECOs. The absence of these internal dimensions inevitably limits the scope of the analysis, especially when it comes to capturing how specific organisations translate institutional pressures into concrete adoption strategies. Future research could explore these interactions more deeply, for instance, sector-specific contexts or disaggregating adoption across public sector domains, to reveal how different institutional configurations and internal dynamics jointly enable adoption.
This study focuses on formal institutions; however, the influence of informal factors should also be considered (Koppenjan and Groenewegen, Reference Koppenjan and Groenewegen2005). Political cycles, social norms, and public demand for transparency may indirectly influence blockchain adoption in the public sector. It remains unclear whether, for instance, investments in infrastructure stem from strategic policy or respond to societal pressure. These informal institutions may also shape the tension between blockchain’s decentralised ethos and the centralised logic of public administration. As adoption matures, understanding whether governance constraints arise from regulation or institutional interpretation becomes critical. Future research should examine how informal dynamics interact with formal structures to influence blockchain’s implementation and scope.
5.3. Reliability and validity
Although our selected method fits the research question, the QCA methodology’s limitations lie in its inability to unravel causal mechanisms, narratives, or the influence of a single variable (Schneider and Wagemann, Reference Schneider and Wagemann2012). The quality of the underlying data, which includes some self-reported elements, inevitably affects the outcomes of the fsQCA. While the PSTW database may not fully capture all public sector blockchain projects, particularly early-stage or undisclosed ones, it remains the most systematic source available. We supplemented it with desk research to improve coverage and consistency across countries.
This study does not assess qualitative dimensions of adoption, such as institutional transformation. Instead, adoption is operationalised as relative intensity based on the number of blockchain projects per capita. To account for the skewed distribution, we carefully calibrated the outcome to avoid overemphasising outliers and interpreted results at both the solution and path levels. As with all QCA studies, our goal is not causal inference but to identify consistent combinations of conditions linked to higher adoption (Ragin, Reference Ragin2000). The findings represent a temporal snapshot; future longitudinal research could track how adoption patterns evolve.
6. Conclusion
We opened the article by asking how institutional factors affect blockchain adoption by PSOs. This adoption process is complex, and our study shows that various institutional conditions can facilitate this process; thus, all our propositions hold true in multiple circumstances. Rather than evaluating the depth or quality of adoption, this study focuses on the intensity of observable adoption—how actively countries engage in blockchain initiatives relative to their size. While not all these projects necessarily led to eventual post-adoption, the tested variable is interpreted here as a proxy for a country’s capacity to engage in blockchain-related innovation. This includes its ability to attract resources, create conditions for innovation ECOs, and respond to regulations promptly, all of which can create enabling conditions for public sector blockchain adoption.
The REG is crucial (Wibowo and Yazid, Reference Wibowo and Yazid2023). More clarity and regulatory guidance will likely lead to more active experimentation, and standard development for blockchain must continue. Nevertheless, as we argue in the “Results” section, the regulation of blockchain and crypto is far from being harmonised in European countries, requiring new standards and methods to guide adoption. Several countries achieved adoption without strong local resources and digital readiness, suggesting that well-aligned legal and community efforts (involving public and private actors) may compensate for weaker systemic conditions. For instance, when they do not have big R&D budgets, applying through the EUF programmes could enhance their adoption, although the EUF alone is not a guarantee for adoption.
Ultimately, this article recognises the peculiarities of the public sector and posits that considering its institutional environment is crucial for understanding why and how new technologies bring changes. While the analysis has focused on PSOs, it is worth noting that public interest organisations may encounter distinct adoption challenges. Greater autonomy and reduced political influence, for instance, could shape different governance dynamics compared to traditional administrations. Exploring these differences offers a promising direction for future research.
Our final message is that since institutions are robust yet not static (Koppenjan and Groenewegen, Reference Koppenjan and Groenewegen2005), they provide stability while evolving. This dynamic nature allows regulators to update guidelines, improve the necessary infrastructure and overall digital connectivity, and shift funding priorities, all of which could enhance or limit blockchain adoption. By focusing on regulation, infrastructure, ECO development, and funding, we capture the current state and potential growth and highlight how these adaptable factors support sustained innovation and increased adoption of blockchain technology in the public sector.
Adoption may be considered redundant to the already available solutions unless a clear value is proposed; thus, blockchain adoption must follow a suitable business case and not be overinvested. It is up to European policymakers to define what the future of this technology looks like in European countries. Given the momentum reached with EBSI and EUROPEUM-EDIC, smaller-scale use cases might become obsolete (Roth and Imeri, Reference Roth and Imeri2023). In turn, more EBSI-based services and processes might emerge in European countries.
New research could explore which institutional factors lead specific use cases to advance in their production if the respective data are available. Significant research efforts must be put into establishing the relationships between institutional factors and the governance of blockchain projects, as well as the system’s openness and the distribution of roles and their accountability. For example, following the framework by Tan et al. (Reference Tan, Mahula and Crompvoets2022), we can argue that the TEC variable corresponds with the micro-, ECO with the meso-, and REG and EUF/RDF to macro-levels of blockchain governance, yet this is to be tested empirically.
Also, if other non-institutional factors were also tested, it would greatly enrich our understanding of blockchain adoption in the public sector. However, this would require a more in-depth, qualitative approach to the existing blockchain applications since it would not be possible to explore their managerial and technological features via desk research.
Certainly, our findings would benefit from additional testing in other geographical contexts. Since no previous research has focused on such pressures and the influence of blockchain in the public sector, our results are instrumental for researchers, policymakers, and PSOs. We also did not cover the impact of societal norms on blockchain adoption: In other words, extending users as part of the institution would strengthen our results, suggesting that future research can also address users’ perceptions of blockchain-based services.
Supplementary material
The supplementary material for this article can be found at http://doi.org/10.1017/dap.2025.10037.
Author contribution
Conceptualization-Lead: S.M.; Conceptualization-Supporting: E.T.; Data Curation-Lead: S.M.; Funding Acquisition-Equal: E.T.; Funding Acquisition-Lead: J.C.; Formal Analysis-Lead: S.M.; Methodology-Lead: S.M.; Methodology-Supporting: E.T., J.C.; Project Administration-Equal: E.T., J.C.; Software-Lead: S.M.; Supervision-Equal: J.C. and E.T.; Writing – Original Draft-Lead: S.M.; Writing – Review & Editing-Lead: S.M.; Writing – Review & Editing-Supporting: E.T., J.C.
Data availability statement
The data supporting the findings of this article were collected via both desk research and public sources, and the dataset is available at the public repository (Mahula, Reference Mahula2025).
Funding statement
The research is financed by the C2 funding programme of KU Leuven No. C24M/20/012.
Competing interests
The authors declare none.
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