Institute of FAME, Inc.

Research · Issue area · CBDC and Digital Money

Digital Monetary Instrument Adoption

Many countries are exploring central bank digital currencies, yet retail use in early-launch markets has been thin. Under what conditions do people actually adopt new forms of digital money?

Evidence on how people respond to central bank digital currencies, stablecoins and other digital money — relevant to central-bank and legislative decisions on retail digital currency.

About this issue area

Many countries are exploring or testing central bank digital currencies (CBDCs), but retail adoption in early-launch markets such as Nigeria, Jamaica and the Bahamas has been limited. The European Central Bank's digital-euro project is the most consequential case in an advanced economy, and the Bank of England has consulted on a possible digital pound. In the United States, a retail CBDC remains a contested policy question.

A study co-authored by the institute's Chair, currently under review at Technological Forecasting and Social Change, identifies a "legitimacy paradox" in EU attitudes: institutional trust raises awareness of digital-euro discussions but lowers interest in adopting it, because people satisfied with current institutions feel less need to switch.

Research questions in this area include: which conditions predict adoption of new digital money in advanced economies; whether the legitimacy-paradox finding holds outside the EU; how communication affects the move from awareness to interest; and what follows for stablecoin and digital-asset policy more broadly.

Plain-language explainer

What this means for you

Public debate over central bank digital currencies is sharply divided. Some see a modern, safe form of public money; others worry about privacy and government reach. Evidence on whether people would actually use one is more useful than either side's pitch.

Early-launch markets have seen limited retail use. The European Central Bank's digital-euro project is the leading advanced-economy case. Whether people adopt new digital money is still an open question.

The Institute of FAME takes no position on whether any country should issue a CBDC. That is a decision for democratic deliberation, not a research conclusion. We study how people respond to digital money so that decisions — whatever they are — are made with evidence.

Where FAME stands

Institutional positions on questions in this area

Question

How should the European Central Bank — and the U.S. Federal Reserve and Bank of England in their respective deliberations — communicate about retail CBDC adoption?

On evidence from a study co-authored by the institute's Chair (under review), institutional-legitimacy framing alone is unlikely to convert citizen awareness of CBDCs into adoption-relevant interest, and may actually suppress migration intent among citizens satisfied with current institutional arrangements (the legitimacy paradox). Effective digital-euro and analogous retail-CBDC communication architectures require stage-specific framing: institutional-credibility messaging is appropriate for the awareness stage, but separate messaging — emphasizing what the new instrument provides that current systems do not — is required to convert awareness into interest. The institute supports communication-architecture research and pilot evaluation that distinguishes these stages explicitly.

Adopted 2026-05-08

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Forthcoming outputs

  • — Paper on staged CBDC adoption in the EU (under review)
  • — Policy brief translating the legitimacy-paradox finding for central banks and legislators (planned)

Policy audiences for this work

  • Federal Reserve Board
  • U.S. Department of the Treasury
  • European Central Bank, digital euro project
  • Bank of England
  • House Financial Services Committee staff
  • Senate Banking Committee staff

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