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The Role of Financial Sanctions and Financial Development Factors on Central Bank Digital Currency Implementation

Author

Listed:
  • Medina Ayta Mohammed

    (Department of Business Economics (Administration, Management, and Organization), Applied Economics II and Fundamentals of Economic Analysis, Universidad Rey Juan Carlos, Paseo de los Artilleros s/n, 28032 Madrid, Spain)

  • Carmen De-Pablos-Heredero

    (Department of Business Economics (Administration, Management, and Organization), Applied Economics II and Fundamentals of Economic Analysis, Universidad Rey Juan Carlos, Paseo de los Artilleros s/n, 28032 Madrid, Spain)

  • José Luis Montes Botella

    (Department of Applied Economy I, Universidad Rey Juan Carlos, Paseo de los Artilleros s/n, 28032 Madrid, Spain)

Abstract

This study investigates the influence of a country’s financial access and stability and the adoption of retail central bank digital currencies (CBDCs) across 71 countries. Using an ordinal logit model, we examine how individual financial access, the ownership of credit cards, financing accessibility by firms, offshore loans, financial sanctions, and the ownership structure of financial institutions influence the probability of CBDC adoption in nations. These findings reveal that nations facing financial sanctions and those with substantial offshore bank loans are more inclined to adopt CBDCs. Furthermore, a significant relationship is observed in countries where many people have restricted financial access, indicating heightened interest in CBDC adoption. Interestingly, no statistically significant relationship was found between the adoption of CBDCs and the percentage of foreign-owned banks in each country. The results show that countries with low financial stability and financial access adopt CBDCs faster. This study expands our knowledge of how a nation’s financial situation influences its adoption of CBDCs. The results provide important and relevant insights into the current discussion of the direction of global finance.

Suggested Citation

  • Medina Ayta Mohammed & Carmen De-Pablos-Heredero & José Luis Montes Botella, 2024. "The Role of Financial Sanctions and Financial Development Factors on Central Bank Digital Currency Implementation," FinTech, MDPI, vol. 3(1), pages 1-16, February.
    • Handle: RePEc:gam:jfinte:v:3:y:2024:i:1:p:9-150:d:1339330
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    References listed on IDEAS

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    Cited by:

    1. Boufateh, Talel & Saadaoui, Zied & Jiao, Zhilun, 2025. "On the time-varying responses of Fintech stock returns to geopolitical, financial and market sentiment shocks," The Quarterly Review of Economics and Finance, Elsevier, vol. 101(C).
    2. Medina Ayta Mohammed & Carmen De-Pablos-Heredero & José Luis Montes Botella, 2025. "Mapping the transformative realm of blockchain-enabled central bank digital currencies: a bibliometric analysis," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 15(1), pages 53-88, March.

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