Unlocking CBDCs’ potential: the role of government support and financial literacy on sustainability

Kanika Thapliyal () and Chandan Gupta
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Kanika Thapliyal: Graphic Era (Deemed to be University)
Chandan Gupta: Graphic Era (Deemed to be University)

Digital Finance, 2025, vol. 7, issue 4, No 5, 703-723

Abstract: Abstract The contemporary era has witnessed exponential growth in cryptocurrency transactions, pushing countries around the globe to explore the viability of establishing their legitimate digital currencies. Though some countries have deployed their digital currencies, some of them are in the trial stages. However, the success of Central Bank Digital Currencies (CBDC) depends on Government support (GS) and Financial Literacy (FL) of the population. Hence, this study empirically assesses the influence of GS and FL on CBDC adoption, which subsequently impacts sustainability. This study was conducted on India’s Generation Z (born 1997–2012), a digitally active segment playing an influential role in the emerging financial market. Based on purposive sampling, 406 respondents provided the data, which was further analyzed using Structural Equation Modeling using Partial Least Squares (SEM-PLS). Empirical findings reveal that GS influences FL (β value = 0.822, p = 0.000), which ensures the smooth adoption of CBDC (β value = 0.379, p = 0.000), leading to sustainability (β value = 0.792, p = 0.000). The research provides valuable suggestions to policymakers to invest in FL campaigns that can accelerate CBDC adoption and achieve the nation’s sustainable development goals.

Keywords: Financial literacy; CBDC adoption; Government support; Sustainability; PLS-SEM (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s42521-025-00158-z

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