How AI and government support influence digital currency use

A new study has shed light on how artificial intelligence (AI) is shaping public readiness to adopt Central Bank Digital Currencies (CBDCs) in China’s banking sector. Drawing on data from 420 banking employees across public and private institutions, the research finds that AI is a powerful force influencing consumers' willingness to engage with digital currency, particularly when combined with awareness of digital technologies, confidence in data privacy, and ease of use.

Published in Humanities and Social Sciences Communications under the title "The impact of artificial intelligence on consumers’ willingness to use CBDCs: evidence from the Chinese banking sector", the study uses a partial least squares structural equation modeling approach to test how AI affects adoption intentions, while also accounting for the moderating effect of government support.

How does AI shape willingness to adopt CBDCs?

The study claims that AI directly and positively influences consumers’ willingness to use CBDCs. In the Chinese context, where the Digital Currency Electronic Payment (DCEP) initiative is a state-driven digital innovation project, AI technologies such as fraud detection systems, chatbots, and personalized financial assistants play a transformative role.

These AI systems not only make the digital currency ecosystem more secure and user-friendly but also enhance consumer trust. Personalized recommendations, predictive insights, and biometric authentication foster familiarity and confidence, which ultimately increase user willingness. The findings indicate that AI systems analyzing consumer behaviors can tailor services that make CBDCs more accessible and relevant, thus boosting adoption.

However, the study underscores that AI’s impact is not just direct. It also affects consumer willingness through three specific mediators: digital technology awareness, privacy concern mitigation, and ease of use. Each of these plays a pivotal role in translating the technological innovation of AI into tangible public engagement with digital currency.

What factors mediate the link between AI and CBDC use?

The first mediator, digital technology awareness, reflects how well consumers understand the functionality, benefits, and potential risks of using CBDCs. The study shows that individuals who are better informed about digital technologies are significantly more inclined to adopt CBDCs. AI indirectly boosts this awareness by driving personalized learning, streamlining user experiences, and facilitating educational interactions, often via chatbots and recommendation engines.

Secondly, addressing privacy concerns emerges as another vital pathway through which AI influences CBDC adoption. In China’s digital financial environment, privacy concerns remain a serious barrier. The study finds that consumers are hesitant to use CBDCs if they fear surveillance or data misuse. However, AI tools that incorporate strong encryption, fraud detection, and transparency protocols help alleviate these fears. In turn, this reassurance translates into higher willingness to engage with the digital yuan and similar instruments.

Thirdly, ease of use is found to be a critical enabler. CBDCs backed by AI-powered platforms are more intuitive, require less cognitive effort, and align well with user expectations, especially those accustomed to services like Alipay or WeChat Pay. From simplified interfaces to natural language-based help systems, AI enhances the usability of digital currency systems. As a result, even consumers with limited technological proficiency are more likely to consider adopting CBDCs when the platform is powered by accessible AI infrastructure.

How crucial is government support in this relationship?

A distinguishing feature of the study is its detailed analysis of government support as a moderating factor. The results indicate that supportive government policies significantly enhance the positive effects of AI on digital technology awareness, privacy reassurance, and ease of use.

Regulatory clarity, public education initiatives, financial incentives, and infrastructure investments all strengthen the bond between AI and public willingness to engage with CBDCs. When the government actively promotes CBDCs and endorses AI-backed platforms, it lends a sense of legitimacy, stability, and trustworthiness to the ecosystem.

The study’s structural model shows that in environments with strong government support, the influence of AI on public behavior is more pronounced. Conversely, in settings where public trust in government is lacking or regulatory support is weak, AI’s effectiveness in promoting CBDCs diminishes. Thus, public policy is positioned not just as a background condition but as an essential catalyst for successful digital currency adoption.

Practical implications and forward directions

This research has wide-reaching implications for policymakers, financial institutions, and technologists involved in designing digital currency ecosystems. For banks and payment platforms, the findings emphasize the need to invest in AI applications that are user-centric, secure, and tailored to various levels of digital literacy.

Policymakers, in turn, are urged to focus on building public confidence through transparency, clear legal frameworks, and collaborative education campaigns. The study highlights the importance of AI-based fraud prevention, privacy-enhancing technologies, and intuitive user interfaces, all of which are essential to convert passive public interest into active participation.

Theoretically, the study extends the Technology Acceptance Model (TAM) by integrating AI into the equation and introducing variables such as privacy concerns and digital awareness as mediating factors. This enriched model provides a more realistic and multi-dimensional understanding of digital currency adoption dynamics.