A new economic study explores a deceptively simple question with huge policy implications: who actually adopts new government-backed financial tools first? The answer could reshape how central banks design future digital currencies.
Since real-world data on Central Bank Digital Currencies (CBDCs) is still scarce, the researcher used a clever real-world proxy: Italy’s 2012 launch of retail Treasury bonds aimed directly at households. These bonds functioned as a government-issued financial product accessible to ordinary people—similar in spirit to how a retail CBDC would work. By analyzing national household survey data, the study uncovered how financial literacy levels influence whether people adopt new financial instruments.
Key Finding #1 — Adoption Isn’t Linear
You might expect that the more financially educated someone is, the more likely they are to adopt a new financial product. Surprisingly, that’s not what happened.
Households with moderate but not high financial literacy were the most likely to adopt the new government bonds.
Why?
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Very low literacy households often didn’t understand the product well enough to participate.
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Highly literate households already had access to more sophisticated investment options and didn’t find the bonds as attractive.
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Moderately literate households understood enough to trust and use the product but still valued its simplicity and safety.
This “middle-knowledge advantage” challenges the common assumption that financial education always increases adoption linearly.
Key Finding #2 — Government Products Shift Portfolios
When the retail bonds launched, households didn’t just add them to their investments. Many shifted money away from stocks and other securities toward the new government bonds.
This suggests that introducing a government-backed financial tool doesn’t just create new activity—it reallocates existing wealth across assets.
For policymakers, that’s critical. A new digital currency wouldn’t simply add another payment method. It could reshape how people store and manage wealth.
Key Finding #3 — Literacy Will Shape CBDC Adoption
Using the empirical results, the researcher built a theoretical economic model to simulate how households with different literacy levels might behave if a CBDC existed.
The model divides people into two types:
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Higher-literacy households
→ Can invest in risky assets and diversify.
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Lower-literacy households
→ Tend to stick to safe, simple assets.
When a digital currency becomes available:
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Lower-literacy households allocate more wealth into CBDC
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Higher-literacy households use riskier investments instead to hedge income uncertainty
In other words:
The people policymakers most expect to adopt CBDC first might not be who actually does.
Key Finding #4 — Uncertainty Changes Everything
When future income becomes uncertain, even financially sophisticated households shift toward safer assets—including CBDC.
So adoption isn’t just about education. It also depends on:
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Economic volatility
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Job security
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Perceived financial risk
During uncertain times, digital public money could become far more attractive—even for experienced investors.
Why This Matters Globally
Central banks worldwide are exploring digital currencies to:
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Replace declining cash usage
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Improve payment efficiency
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Maintain monetary policy control
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Increase financial inclusion
But adoption isn’t guaranteed. If too few people use a CBDC, it fails to deliver its intended benefits.
This study shows that communication strategy may matter as much as technology design. Clear explanations and simple onboarding could dramatically increase adoption among households with limited financial knowledge.
Policy Insight — Design for Real People, Not Ideal Users
One of the paper’s strongest conclusions is practical:
If governments want widespread adoption of new financial tools, they must design them for people with average financial literacy—not experts.
That means:
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Simple interfaces
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Clear benefits
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Low information barriers
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Trust-building communication
Otherwise, adoption could remain limited to a narrow segment of the population.
Big Picture Takeaway
This research reveals a powerful insight:
Financial literacy doesn’t just influence how people invest—it determines whether they participate at all.
And when a new public financial instrument launches, the biggest adopters may be those in the middle—not the least informed and not the most sophisticated.
For CBDCs, that insight could decide whether digital government money becomes mainstream… or quietly fades away.
source: https://arxiv.org/pdf/2506.12575
