The role of financial literacy in accelerating the adoption of a central bank digital currency

Abstract

Education plays a vital role in development and adoption of new technologies, making financial education particularly important for the advancement and acceptance of financial innovations. This study explores the impact of financial literacy on the adoption of central bank digital currencies (CBDCs), using data from 72 countries spanning 2010 to 2023. Findings from ordered logistic, ordered probit, logistic, probit, and ordinary least squares consistently reveal that higher levels of financial literacy significantly increase the likelihood of CBDC adoption. Notably, incorporating financial education into primary, secondary, and university curricula has a strong, positive impact on adopting a CBDC. Conversely, countries that have yet to implement financial literacy in public school curricula, but intend to, are currently less likely to adopt CBDCs. These results suggest that for countries planning to launch a CBDC, investment in financial literacy is critical step toward encouraging adoption.

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