Introducing a new index of central bank digital currency development
- Mỹ Huyền Trần
- 4 days ago
- 2 min read
In a context where 137 countries representing 98% of global GDP are exploring CBDCs (Central Bank Digital Currencies), a new study by Dr. Nguyen Phuc Canh, HAPRI's Senior Researcher, introduces a breakthrough tool: the Global CBDC Development Index - the first instrument to track CBDC progress monthly from 2014 to 2025 across 98 central bank projects.
Despite hundreds of studies on CBDCs, there has been no standardized, high-frequency index to track global CBDC development progress. Existing indices either measure "uncertainty" through news text analysis (Wang et al. 2022) or provide only annual qualitative assessments. This is a critical gap when policymakers and investors need real-time data for risk management.
The research team developed two versions of the index (equal-weighted and GDP-weighted) and uncovered remarkable relationships:
CBDCs Are Not the Enemy: Contrary to predictions, CBDC development has a positive long-term impact on prices, trading volumes, and market capitalization of major cryptocurrencies (Bitcoin, Ethereum, XRP, etc.)
Market Stabilization: CBDCs help reduce price volatility for most digital assets in the long run - good news for risk-averse investors
Short-Term Paradox: Despite long-term benefits, new CBDC announcements can trigger short-term caution, with temporarily declining trading volumes
Rising Uncertainty: Paradoxically, as more CBDC projects develop, the "CBDC uncertainty index" actually increases - reflecting concerns about unclear regulations and impacts
When central banks develop CBDCs, they're sending a powerful message that blockchain technology and digital assets have legitimate potential. This increases public confidence in the entire crypto ecosystem, leading to long-term growth.
The research highlights three critical points:
Transparent communication: Central banks need to be careful in how they communicate CBDC progress to avoid unnecessary market volatility
Standardized measurement tools: Our index provides a benchmark tool for researchers and policymakers
Cross-border coordination: International policy coordination is needed to ensure interoperability and financial stability
Keywords:
CBDC
Cryptocurrency
Bitcoin market
Development index
Central banking
Monetary policy
Link:
Citation:
Nguyen, C.P., Doan, N., Chavez-Bedoya, L. et al. (2025). Introducing a new index of central bank digital currency development. Qual Quant. https://doi.org/10.1007/s11135-025-02417-y
