Central Bank Digital Currency Adoption Challenges, Solutions, and a Sentiment Analysis

Central Bank Digital Currency Adoption Challenges, Solutions, and a Sentiment Analysis

2024, 1, pp. 133-165 Received: 09 February 2023; accepted: 15 May 2023 | Peterson K. Ozili *, Sergio Luis Náñez Alonso **
This paper examines the factors limiting the adoption of Central Bank Digital Currencies (CBDCs) and possible solutions, while also assessing media sentiment about CBDCs in general and locally issued CBDCs. The authors identify several challenges, including the lack of digital skills among citizens, the perception that CBDCs offer no advantages over existing digital payment methods, privacy and security concerns, and distrust in CBDCs compared to fiat money and cryptocurrencies. They propose solutions such as financial education and digital skills programs, ensuring privacy and security, offering interest rates for CBDC accounts, implementing programmable CBDCs, and regulating or prohibiting the use of other digital payment methods. The media sentiment analysis reveals a high correlation between negative media sentiment about CBDCs in general and locally issued CBDCs, indicating that negative sentiments are contagious. Positive media sentiment about CBDCs is less correlated with positive sentiments about specific CBDCs, suggesting that individual CBDCs have unique perceptions. The study contributes to the literature by providing insights into the factors limiting CBDC adoption and the effectiveness of various solutions, as well as the role of media sentiment in shaping public perception.This paper examines the factors limiting the adoption of Central Bank Digital Currencies (CBDCs) and possible solutions, while also assessing media sentiment about CBDCs in general and locally issued CBDCs. The authors identify several challenges, including the lack of digital skills among citizens, the perception that CBDCs offer no advantages over existing digital payment methods, privacy and security concerns, and distrust in CBDCs compared to fiat money and cryptocurrencies. They propose solutions such as financial education and digital skills programs, ensuring privacy and security, offering interest rates for CBDC accounts, implementing programmable CBDCs, and regulating or prohibiting the use of other digital payment methods. The media sentiment analysis reveals a high correlation between negative media sentiment about CBDCs in general and locally issued CBDCs, indicating that negative sentiments are contagious. Positive media sentiment about CBDCs is less correlated with positive sentiments about specific CBDCs, suggesting that individual CBDCs have unique perceptions. The study contributes to the literature by providing insights into the factors limiting CBDC adoption and the effectiveness of various solutions, as well as the role of media sentiment in shaping public perception.
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[slides and audio] Central Bank Digital Currency Adoption Challenges%2C Solutions%2C and a Sentiment Analysis