The determinants of issuing central bank digital currencies

Abdelrahman J.K. Alfar, Chamaiporn Kumpamool, Dung T.K. Nguyen and Rizwan Ahmed

Research in International Business and Finance, 2023, vol. 64, issue C

Abstract: Central Bank Digital Currencies (CBDC) are considered ‘digital fiat currencies’ that do not have a physical form, which is a key distinction from conventional fiat money. This study aims to identify factors that influence central banks’ decisions in taking advanced actions to issue CBDC, namely, the economic, market, demographic and technical factors. Data is collected from the CBDC Tracker and the WB database for the period 2013–2021. We applied the Pooled OLS estimations to examine the impact of the key factors on being in an advanced stage for issuing CBDC; moreover, probit and logistic regression are employed to robust our results and overcome the limitations of Pooled OLS. The findings demonstrate that underdeveloped economies are more engaged in issuing CBDC. Besides, better regulations, FDI inflow, young populations, and more urban societies would increase the probability of CBDC issuance. Nevertheless, results show the impact of technical factors is heterogeneous across countries.

Keywords: Money supply; Central banks and their policies; Financial system; Central bank digital currencies (search for similar items in EconPapers)
JEL-codes: E51 E58 G28 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:64:y:2023:i:c:s0275531923000107

DOI: 10.1016/j.ribaf.2023.101884

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