Analyzing influence of COVID-19 on crypto & financial markets and sentiment analysis using deep ensemble model
2023Gali V, Rustam F, Lee E, Aljedaani W, Washington PB, Ashraf I
PLOS ONE, 18(6), e0286541
Research · Issue area · CBDC and Digital Money
Digital Monetary Instrument Adoption
134 jurisdictions are exploring central bank digital currencies, yet retail adoption in the early-launch markets has been thin. Under what behavioral conditions will citizens of developed-economy CBDC issuers actually migrate to the new instruments?
Behavioral-adoption evidence on central bank digital currencies, stablecoins, and other digital monetary instruments — informing ECB digital-euro communication strategy and U.S. Federal Reserve / Bank of England deliberations.
About this issue area
Approximately 134 countries covering 98% of global GDP are exploring or testing central bank digital currencies, yet retail CBDC adoption in early-launch markets has been strikingly thin: fewer than 0.5% of Nigerians actively use the eNaira; Jamaicans hold less than one U.S. dollar per capita in CBDCs; the Bahamian Sand Dollar has seen similarly limited uptake. The European Central Bank's digital-euro program is the most consequential active case in a developed-economy context. The U.S. Federal Reserve has pursued an evolving stance on a potential digital dollar; the Bank of England's digital-pound consultation is ongoing.
A FAME-funded study currently under review at Technological Forecasting and Social Change identifies a robust legitimacy paradox in EU CBDC pre-adoption: institutional trust drives awareness of digital-euro discussions but reduces interest in adopting the instrument, because citizens satisfied with current institutions feel less need to migrate. The finding has direct implications for the ECB's communication strategy and for U.S. and U.K. central-bank deliberations of comparable retail CBDCs.
The issue area's research questions span: which behavioral conditions predict CBDC adoption in developed-economy contexts; how the legitimacy paradox finding generalizes from the EU evidence base to the U.S. and U.K.; what stage-specific communication strategies would help convert awareness into interest; and what policy implications follow for stablecoin and digital-asset regulation more broadly.
Plain-language explainer
What this means for you
You may have heard about central bank digital currencies — CBDCs — somewhere in the news cycle. Maybe a politician warned that "they" want to track every purchase you make. Maybe a financial publication promoted the technology as the future of payments. The actual evidence is more interesting than either pitch — and more relevant to whether a future digital dollar, digital euro, or digital pound is something working families should embrace, accept, or resist.
134 countries are exploring or testing CBDCs. The early-launch markets have produced strikingly thin retail adoption: fewer than 0.5% of Nigerians actively use the eNaira; Jamaicans hold less than one dollar per capita in CBDCs; the Bahamian Sand Dollar has seen similarly limited uptake. The European Central Bank's digital-euro program is the most consequential developed-economy case currently in motion. The U.S. Federal Reserve and Bank of England have ongoing deliberations. The retail-adoption question is genuinely open.
A FAME-funded study currently under review identifies a counter-intuitive finding: in the European Union, institutional trust drives awareness of digital-euro discussions but reduces interest in adopting the instrument. Citizens satisfied with current institutions feel less need to migrate. We call this the "legitimacy paradox." It has direct implications for the European Central Bank's communication strategy and for analogous U.S. and U.K. central-bank deliberations of retail CBDCs.
The Institute of FAME does not take a position on whether developed-economy CBDCs should exist. That is a policy question requiring democratic deliberation, not a research conclusion. What we do is fund the behavioral-adoption research that informs the deliberation: how citizens of different countries respond to digital-monetary-instrument communication; what stage-specific strategies might bridge awareness and interest; what design and rollout choices map to which adoption outcomes; and what policy lessons the early-launch markets offer the central banks considering CBDCs next.
Your support funds the behavioral-finance research that translates from individual-citizen response data into useful evidence for the Federal Reserve, the Bank of England, and the European Central Bank as they decide whether and how to issue retail CBDCs. The decision affects everyone with a bank account. The research is how we make sure the decision is made with evidence rather than vibes.
Evidence base
FAME-funded and affiliated research in this area
Peer-reviewed publications that anchor FAME's standing in this issue area.
Sentiment Analysis and Emotion Detection on Cryptocurrency Related Tweets Using Ensemble LSTM-GRU Model
2022Aslam N, Rustam F, Lee E, Washington PB, Ashraf I
IEEE Access, 10, 39313–39324
Active programs
FAME programs producing evidence in this area
Program · FinTech Sandbox
FinTech Adoption & Regulatory Sandboxes
How regulatory sandboxes shape banking competition, and how FinTech adoption reaches small and mid-sized enterprises in emerging markets.
Two peer-reviewed papers in print
Program · Applied BF
Applied Behavioral Finance
Behavioral-finance methods applied to professional sports labor-market contracts, designed to be validated longitudinally against realized career outcomes.
Active methodology development
Where FAME stands
Institutional positions on questions in this area
Question
How should the European Central Bank — and the U.S. Federal Reserve and Bank of England in their respective deliberations — communicate about retail CBDC adoption?
On evidence from the institute's CBDC pre-adoption research, institutional-legitimacy framing alone is unlikely to convert citizen awareness of CBDCs into adoption-relevant interest, and may actually suppress migration intent among citizens satisfied with current institutional arrangements (the legitimacy paradox). Effective digital-euro and analogous retail-CBDC communication architectures require stage-specific framing: institutional-credibility messaging is appropriate for the awareness stage, but separate messaging — emphasizing what the new instrument provides that current systems do not — is required to convert awareness into interest. The institute supports communication-architecture research and pilot evaluation that distinguishes these stages explicitly.
Adopted 2026-05-08
See the full Positions surface for the institute's positions across all issue areas.
Forthcoming outputs
- — TFSC paper on CBDC staged adoption (target publication Q3 2026)
- — Policy brief translating the legitimacy-paradox finding for U.S. Federal Reserve digital-dollar deliberations
- — Invitation-only briefing on developed-economy CBDC consumer-adoption conditions
- — Regulatory comments on stablecoin and digital-asset rulemakings
Policy actors we engage in this area
- Federal Reserve Board Division of Reserve Bank Operations and Payment Systems
- U.S. Treasury Office of Domestic Finance
- European Central Bank Digital Euro project office
- Bank of England digital-pound team
- House Financial Services Committee digital-currency subcommittee
- Senate Banking Committee