Developing central bank digital currencies: a reality check during cryptocurrency euphoria

• Iulia Cioroianu ^[1] ; Shaen Corbet ^[2] ; Charles Larkin ^[3] ; Les Oxley ^[2]
  1. [1] University of Bath

     University of Bath

     Reino Unido

     
  2. [2] University of Waikato

     University of Waikato

     Nueva Zelanda

     
  3. [3] Johns Hopkins University

     Johns Hopkins University

     Estados Unidos

     

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• Localización: Economics and Business Letters, ISSN-e 2254-4380, Vol. 12, Nº. 2, 2023, págs. 105-114
• Idioma: inglés
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• Resumen

  • Using estimated sentiment indices based on CBDC-related social media posts, and testing for the effects of regulatory-related announcements upon blockchain and cryptocurrency-related funds, this research presents two key findings: first, the continued evolution of the pricing structures of digital finance products to respond to such perceived threats constitutes a further evolutionary point in the product's life-cycle. However, secondly, the very fact that returns fall while volatility increases, indicates a largely negative market response to the threat of potential external regulation of cryptocurrencies in the future. The nature of this negative response validates concerns that anonymity continues to be a central attractive feature for cryptocurrency stakeholders, further verifying the necessity for third-party oversight.