Central bank digital currency and systemic risk

Rizwan, Muhammad Suhail, Ahmad, Ghufran ORCID: https://orcid.org/0000-0002-2454-9335 and Qureshi, Anum 2025. Central bank digital currency and systemic risk. Journal of International Financial Markets, Institutions and Money 99 , 102104. 10.1016/j.intfin.2024.102104

PDF - Published Version Available under License Creative Commons Attribution. Download (1MB)

Abstract

Central Bank Digital Currency (CBDC) is an emerging Financial Technology (FinTech) area. Several countries are involved in CBDC development at different stages and a few are already in the launching stage. We use the autoregressive distributed lag approach to explore the association between CBDC-related news and systemic risk in the short and long run by employing dynamic panel heterogeneity analysis. The results show that CBDC-related news has a significant negative association with systemic risk in the long run, indicating a positive reception by the global financial sector. Extended analysis shows that the long-run negative association is consistent across different income levels and geographical regions. However, countries in the advanced stages of CBDC development show a significant positive association between CBDC-related news and systemic risk warranting the utmost care in implementing CBDC initiatives.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Publisher:	Elsevier
ISSN:	1042-4431
Date of First Compliant Deposit:	9 January 2025
Date of Acceptance:	14 December 2024
Last Modified:	09 Jan 2025 13:00
URI:	https://orca.cardiff.ac.uk/id/eprint/174926

Actions (repository staff only)

Edit Item