From research to launch: Tracing and mapping developmental pathways in CBDC progression

Abstract

The race to issue Central Bank Digital Currencies is underway, yet countries face strikingly divergent trajectories, with some experimenting boldly while others proceeding cautiously. This study examines why Central Bank Digital Currency (CBDC) projects progress unevenly across countries by framing CBDC progression as a policy–technology–behavioral system. Using a panel of 133 countries over the period 2017–2024, spanning stages from early research to live retail launches, the analysis integrates digital diffusion theory, behavioral trust models, and a public policy innovation perspective to examine cross-country heterogeneity. CBDC progression is analyzed using a mixed-effects ordered logit model, complemented by development-specific estimations and robustness checks. Understanding these divergent pathways is directly relevant to central banks, particularly in emerging and developing economies, as they seek to sequence CBDC reforms amid institutional and digital constraints.

The findings reveal three patterns. First, technological readiness and digital trust infrastructure, particularly internet usage, cybersecurity preparedness, and digital literacy, are consistently associated with more advanced stages of CBDC progression. Second, regulatory quality and public digital participation exhibit consistently negative associations, in line with regulatory prudence and payment system pressures, although alternative institutional and political explanations cannot be excluded. Third, development-specific results indicate distinct pathways: diffusion- and skills-related associations in advanced economies; connectivity- and cyber-resilience-related associations in developing economies; and mobile-first but cybersecurity-threshold-constrained patterns in least developed countries. Overall, CBDC progression reflects the interaction among technological capacity, institutional conditions, and regulatory and legitimacy considerations, highlighting differentiated, context-sensitive associations rather than uniform causal drivers of CBDC policy design.