Governance and monetary policy impacts on public acceptance of CBDC adoption

Abstract

Launching the central bank digital currency (CBDC) is increasingly recognized as a key priority by several governments. Unknown are, however, the primary factors of public support for the initiative and CBDC acceptance choices. Moreover, despite the fact that CBDC's success requires substantial public support, there is less empirical data of how the public perceives and speaks about it. This research seeks to fill in these gaps using Facebook data from May 2012 to April 2022 using deep learning algorithms for text mining. This research demonstrates that government performance, inflation rate, economic inequality, and technological literacy have a significant influence on the public's perception of CBDC. The government's support of CBDC is determined by public sentiment, the degree of adoption of decentralized finance (Defi), and monetary policy settings. The degree of wealth inequality and technological literacy are two other demographic elements that influence the government's adoption of CBDC.