Central bank speeches and digital currency competition

Stefan Scharnowski

Finance Research Letters, 2022, vol. 49, issue C

Abstract: This paper studies how cryptocurrency investors view central bank digital currencies (CBDCs) by exploiting the market reaction to central bank speeches. Prices react asymmetrically to the speeches, increasing more strongly after speeches that take a more positive stance. Similarly, while volatility generally increases, negative CBDC sentiment has a slight amplifying effect. The results indicate that traders do not view CBDCs as a threat to cryptocurrencies. Rather, more positive stances on CBDCs appear to be interpreted as favorable signals for other forms of digital currencies as well.

Keywords: Bitcoin; Cryptocurrency; Central bank digital currencies; CBDC; Central bank communication; Currency competition (search for similar items in EconPapers)
JEL-codes: E42 E58 F31 G12 G15 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:49:y:2022:i:c:s1544612322003038

DOI: 10.1016/j.frl.2022.103072

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