Cryptocurrencies and Central Bank Digital Currencies in Global Perspective

Yongsheng Guo (), Ezaddin Yousef and Mirza Muhammad Naseer
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Yongsheng Guo: International Business School, Teesside University, Middlesbrough TS1 3BA, UK
Ezaddin Yousef: International Business School, Teesside University, Middlesbrough TS1 3BA, UK
Mirza Muhammad Naseer: International Business School, Teesside University, Middlesbrough TS1 3BA, UK

JRFM, 2025, vol. 18, issue 11, 1-23

Abstract: This study investigates the relationship between cryptocurrency adoption rates (CARs) and the development of central bank digital currencies (CBDCs) using a global panel of 109 countries from 2020 to 2024. The analysis employs pooled OLS, fixed effects, ordered logistic regression and GMM models with robust controls for macroeconomic indicators, institutional quality, and technological readiness. CBDC status is measured as an ordinal variable representing five development stages, while CAR is derived from the Chainalysis Crypto Adoption Index. The empirical results show that higher CAR significantly increases the probability of a country progressing to more advanced CBDC stages. Margins analysis further indicates that increases in CAR substantially reduce the likelihood of remaining in early CBDC phases and raise the probability of reaching the pilot or launched stages. Heterogeneity analysis reveals that this relationship is strongest in low- and middle-income economies and in countries with low levels of financial inclusion, where cryptocurrencies present greater competition to traditional financial systems. The study contributes new large-sample evidence to the debate on digital currencies and provides policy-relevant insights: central banks in financially constrained economies appear to adopt CBDCs as developmental tools to enhance financial access and preserve monetary sovereignty in the face of growing cryptocurrency adoption.

Keywords: central bank digital currency; cryptocurrency adoption; digital finance; financial inclusion; monetary policy (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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