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Analysis of CBDC Narrative OF Central Banks using Large Language Models

Author

Listed:
  • Andres Alonso-Robisco

    (Banco de España)

  • Jose Manuel Carbo

    (Banco de España)

Abstract

Central banks are increasingly using verbal communication for policymaking, focusing not only on traditional monetary policy, but also on a broad set of topics. One such topic is central bank digital currency (CBDC), which is attracting attention from the international community. The complex nature of this project means that it must be carefully designed to avoid unintended consequences, such as financial instability. We propose the use of different Natural Language Processing (NLP) techniques to better understand central banks’ stance towards CBDC, analyzing a set of central bank discourses from 2016 to 2022. We do this using traditional techniques, such as dictionary-based methods, and two large language models (LLMs), namely Bert and ChatGPT, concluding that LLMs better reflect the stance identified by human experts. In particular, we observe that ChatGPT exhibits a higher degree of alignment because it can capture subtler information than BERT. Our study suggests that LLMs are an effective tool to improve sentiment measurements for policy-specific texts, though they are not infallible and may be subject to new risks, like higher sensitivity to the length of texts, and prompt engineering.

Suggested Citation

  • Andres Alonso-Robisco & Jose Manuel Carbo, 2023. "Analysis of CBDC Narrative OF Central Banks using Large Language Models," Working Papers 2321, Banco de España.
  • Handle: RePEc:bde:wpaper:2321
    DOI: https://doi.org/10.53479/33412
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    Cited by:

    1. Can Celebi & Stefan Penczynski, 2024. "Using Large Language Models for Text Classification in Experimental Economics," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 24-01, School of Economics, University of East Anglia, Norwich, UK..
    2. Dong, Mengming Michael & Stratopoulos, Theophanis C. & Wang, Victor Xiaoqi, 2024. "A scoping review of ChatGPT research in accounting and finance," International Journal of Accounting Information Systems, Elsevier, vol. 55(C).
    3. Ito, Arata & Sato, Masahiro & Ota, Rui, 2025. "A novel content-based approach to measuring monetary policy uncertainty using fine-tuned LLMs," Finance Research Letters, Elsevier, vol. 75(C).
    4. Chong Zhang & Xinyi Liu & Zhongmou Zhang & Mingyu Jin & Lingyao Li & Zhenting Wang & Wenyue Hua & Dong Shu & Suiyuan Zhu & Xiaobo Jin & Sujian Li & Mengnan Du & Yongfeng Zhang, 2024. "When AI Meets Finance (StockAgent): Large Language Model-based Stock Trading in Simulated Real-world Environments," Papers 2407.18957, arXiv.org, revised Sep 2024.
    5. Julian Junyan Wang & Victor Xiaoqi Wang, 2025. "Assessing Consistency and Reproducibility in the Outputs of Large Language Models: Evidence Across Diverse Finance and Accounting Tasks," Papers 2503.16974, arXiv.org, revised Jun 2025.
    6. Wu, WenTing & Chen, XiaoQian & Zvarych, Roman & Huang, WeiLun, 2024. "The Stackelberg duel between Central Bank Digital Currencies and private payment titans in China," Technological Forecasting and Social Change, Elsevier, vol. 200(C).
    7. Wood, Katherine & Pyun, Chaehyun & Pham, Hieu, 2025. "Beyond Green Labels: Assessing Mutual Funds’ ESG Commitments through Large Language Models," Finance Research Letters, Elsevier, vol. 74(C).
    8. Arata ITO & Masahiro SATO & Rui OTA, 2024. "Content-based Metric on Monetary Policy Uncertainty by Using Large Language Models," Discussion papers 24080, Research Institute of Economy, Trade and Industry (RIETI).

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    More about this item

    Keywords

    ChatGPT; BERT; CBDC; digital money;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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