Financial Literacy and Behavioral Intention to Use Central Banks’ Digital Currency: Moderating Role of Trust

Mohanamani Palanisamy, Maria Tresita Paul Vincent () and Md Billal Hossain
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Mohanamani Palanisamy: KCT Business School, Kumaraguru College of Technology, Coimbatore 641049, India
Maria Tresita Paul Vincent: School of Business and Economics, Westminster International University in Tashkent (WIUT), Tashkent 100047, Uzbekistan
Md Billal Hossain: School of Business and Economics, Westminster International University in Tashkent (WIUT), Tashkent 100047, Uzbekistan

JRFM, 2025, vol. 18, issue 3, 1-13

Abstract: Building on the Innovation Diffusion Theory, this study proposes and explores the influence of financial literacy on the behavioral intention to use central banks’ digital currency (CBDC) and the moderating role of trust of respondents in the financial institution on the above relationship. This study has employed a quantitative research design to examine the relationship between financial literacy, behavioral intention to use CBDC and trust. The final sample comprised 241 respondents who had used CBDC across India. The statistical relationship between the above variables was assessed using PROCESS macro in SPSS 23.0. Findings revealed that financial literacy emerges as a strong predictor of CBDC use. Individuals with higher financial literacy are more likely to understand the features, benefits and risks associated with adopting CBDC. The interaction effect reveals that as financial literacy increases, the relative importance of trust diminishes. On the other hand, those who lack sufficient knowledge of financial literacy depend more on trust to fill in their knowledge gaps. This is one of the first studies to scientifically support the relationship between trust and financial literacy and how both influence behavioral intention to use CBDC. This research contributes valuable knowledge to the discourse on the use of CBDC, which is crucial for achieving a nation’s broader digital transformational goal.

Keywords: financial literacy; central banks’ digital currency; CBDC; behavioral intention; trust; digital payment (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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