Central Bank Digital Currency: Policy Implications Through Polarity and Sentiment Analysis

This discourse delves into the policies and whitepapers of cross-border Central Bank Digital Currencies (CBDC), framed by advanced economies and monetary unions. The discourse analyses policies of respective entities comprising governments, central banks, and monetary unions, using R codes on the policy corpus. The analyses conducted for each entity identify their sentiment (positive/negative), polarity (degree of sentiment), valence (polarity weights), distribution of polarity, and financial bend. The sentiment of the entities is determined through NRC emotion lexicon and the financial bend of the entities is identified through unique financial words vis-à-vis the Loughran-McDonald Master Dictionary (LMMD) lexicon. A comparative analysis between each entity is performed to find their Jaccard Similarity (JS) index. A normality test for each policy corpus using the Jarque–Bera (JB) test is performed. The JB test identifies that each entity has a differing sentiment score and none of the sentiment and emotion scores are normally distributed. The results of the financial bend in the CBDC policies identify that the policy corpus of each entity predominantly contains non-polar neutral statements. However, the varying degrees of polarity among the entities, their polarity distribution pattern, their financial bend, and their JS index identify that the entities are making significant efforts in framing restrained but optimistic and inclusive policies.