Zeng LYoung MRHao W2025-08-132025-08-132025-11Zeng L, Young MR, Hao W. (2025). Currency digitalization: The supply, demand, and infrastructure aspects of china's central bank digital currency. Finance Research Letters. 85. Part B.1544-6123https://mro.massey.ac.nz/handle/10179/73348This paper studies how digitalization affects the adoption of China's central bank digital currency (e-CNY). Utilizing provincial-level panel data from 2011 to 2021, we examine the impacts of "Breadth of Digitalization Coverage" and "Digitalization Level" on the supply and demand dynamics of e-CNY. Our findings show that digitalization reduces both the supply and demand of physical currency. This decreasing reliance on physical currency implies that digitalization has paved the way for adopting e-CNY. We further investigate the infrastructural factors that support digitalization progression and e-CNY's implementation. Our results suggest that the transition from physical to digital currency is jointly driven by wallet digitalization (enabled by smartphones) and payment scenario digitalization (supported by e-commerce). Our result findings provide implications to both China and other countries developing CBDC initiatives.(c) 2025 The Author/sCC BY 4.0https://creativecommons.org/licenses/by/4.0/Central bank digital currencye-CNYCurrency digitalizationDigital walletsDigital payment scenariosCash substitutionJournal article10.1016/j.frl.2025.108001journal-article108001