The development of Central Bank Digital Currencies (CBDC hereafter) has been observed as one of the largest and most progressive movements by central banks in recent times. This paper sets out to specifically investigate how both market perceptions and central bank signalling of CBDC development have influenced cryptocurrency price returns and price volatility. We separate 1,755 cryptocurrencies by types of algorithm, category, industry, and underlying platform, offering a taxonomic review of the influence of social media response and CBDC announcement effects upon cryptocurrency sub-type. The key results of this research indicate that cryptocurrencies and assets that are most exposed to competitive or regulatory changes due to increased central bank oversight or the introduction of CBDC have had the most acute responses in terms of returns and price volatility. Central banks do not appear to not have focused on the granularity of cryptocurrencies, which are a heterogeneous collection that necessitates careful regulation to enhance market stability while protecting market participants.

Original languageEnglish
Pages (from-to)597-626
Number of pages30
JournalReview of Corporate Finance
Issue number4
Publication statusPublished - 11 Sept 2023


  • Central bank digital currencies
  • central banking
  • cryptocurrencies
  • sentiment

ASJC Scopus subject areas

  • Accounting
  • Economics, Econometrics and Finance (miscellaneous)
  • Finance

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