2024 | Peterson K. Ozili, Sergio Luis Náñez Alonso
This paper identifies factors limiting the adoption of central bank digital currencies (CBDCs) and explores possible solutions. It also assesses media sentiment towards CBDCs, including locally issued ones. The study finds a high correlation between negative media sentiment about CBDCs in general and locally issued CBDCs. Negative sentiment about specific CBDCs like eNaira, DCash, and Sand Dollar is attributed to general negative sentiment about CBDCs, while positive sentiment about these CBDCs is not caused by general positive sentiment about CBDCs. The study uses a desk survey approach to analyze media sentiment, classifying articles into positive and negative sentiments. It finds that 2021 and 2022 had more positive and negative sentiments than previous years. The eNaira received more negative sentiment than the Sand Dollar and DCash. The study contributes to the literature by analyzing CBDCs through sentiment analysis and identifying factors limiting CBDC adoption. It also highlights the importance of media sentiment in shaping public perception of CBDCs. The study identifies key challenges in CBDC adoption, including lack of digital skills, competition with existing digital payment methods, privacy and security concerns, and distrust in CBDCs compared to fiat money and cryptocurrencies. Possible solutions include financial education programs, CBDCs that respect privacy and security, offering interest rates on CBDC accounts, and programmable CBDCs. The study also finds that prohibiting other digital payment methods may not effectively increase CBDC adoption. The analysis of media sentiment shows that negative sentiment about CBDCs was high in 2017 and increased in 2022 due to debates about CBDC use cases and design. Positive sentiment about CBDCs was high in 2018 and 2022. The study concludes that improving media perception of CBDCs is crucial for their acceptance.This paper identifies factors limiting the adoption of central bank digital currencies (CBDCs) and explores possible solutions. It also assesses media sentiment towards CBDCs, including locally issued ones. The study finds a high correlation between negative media sentiment about CBDCs in general and locally issued CBDCs. Negative sentiment about specific CBDCs like eNaira, DCash, and Sand Dollar is attributed to general negative sentiment about CBDCs, while positive sentiment about these CBDCs is not caused by general positive sentiment about CBDCs. The study uses a desk survey approach to analyze media sentiment, classifying articles into positive and negative sentiments. It finds that 2021 and 2022 had more positive and negative sentiments than previous years. The eNaira received more negative sentiment than the Sand Dollar and DCash. The study contributes to the literature by analyzing CBDCs through sentiment analysis and identifying factors limiting CBDC adoption. It also highlights the importance of media sentiment in shaping public perception of CBDCs. The study identifies key challenges in CBDC adoption, including lack of digital skills, competition with existing digital payment methods, privacy and security concerns, and distrust in CBDCs compared to fiat money and cryptocurrencies. Possible solutions include financial education programs, CBDCs that respect privacy and security, offering interest rates on CBDC accounts, and programmable CBDCs. The study also finds that prohibiting other digital payment methods may not effectively increase CBDC adoption. The analysis of media sentiment shows that negative sentiment about CBDCs was high in 2017 and increased in 2022 due to debates about CBDC use cases and design. Positive sentiment about CBDCs was high in 2018 and 2022. The study concludes that improving media perception of CBDCs is crucial for their acceptance.