Consumers are skeptical of CBDC, prefer cash and private cryptocurrencies
Although 94% of the world's central banks are exploring the possibility of issuing central bank digital currencies (CBDC), the latest Deutsche Bank poll shows that consumers are still cautious about using such digital currencies and prefer to use cash. and private cryptocurrencies.
The survey, conducted between March and July this year, interviewed 4,850 respondents from Europe, the UK and the US. The results showed that 59% of participants believed that cash will always be useful, and 44% said they would rather use cash than a CBDC. The preference highlights the significant challenges government-backed digital currencies face in widespread adoption.
Privacy concerns are one of the main reasons behind skepticism about CBDCs. Many respondents expressed concerns about the lack of anonymity in central bank-issued digital currencies. In contrast, cash and private cryptocurrencies offer a level of privacy that consumers feel more comfortable with.
The popularity of CBDC is limited, and traditional payment methods still dominate
Despite the growing push for digital payments globally, only 16% of respondents believe CBDC will become mainstream. This skepticism persists even as most central banks explore the potential of digital currencies. The survey noted that consumers are yet to be convinced of the advantages of CBDC over traditional cash.
Notably, 31% of respondents said they would prefer to use a cryptocurrency managed by a central bank or government, while only 21% chose to use a private cryptocurrency like Bitcoin. This shows that some consumers still have a certain degree of trust in government-backed digital currencies, but overall, traditional payment methods still dominate.
The survey also found that 21% of respondents in the United States believe cryptocurrencies in general are better for privacy than government-backed cryptocurrencies. In contrast, more European consumers prefer using cash because of anonymity than respondents in the UK and US.
"While 59% of consumers believe cash will always be relevant, the COVID-19 pandemic has accelerated the shift to digital payments, especially among Generation Z," Deutsche Bank analysts Marion Laboure and Sai Ravindran said in the report.
However, this has not significantly changed the overall payments landscape.
The central bank needs to solve privacy and trust issues and promote the development of CBDC
The survey highlights that in order for CBDC to gain wider acceptance, it is crucial to address privacy concerns. Central banks may need to consider how to provide greater anonymity in their digital currency schemes. Additionally, educating consumers on the benefits of CBDC, such as safety and convenience, may also help change public perceptions.
Deutsche Bank noted that central banks are increasingly focused on using CBDC in wholesale applications, as evidenced by recent initiatives launched by the Swiss National Bank, the European Central Bank and the Federal Reserve Bank of New York. However, consumer distrust of CBDC remains a major barrier to widespread adoption.
Overall, this survey reflects that in the era of digital currency, traditional payment methods still have a solid foundation. In the future, to promote the popularity of CBDC, governments and financial institutions need to have a deeper understanding of consumer needs and concerns and take corresponding measures to increase trust and acceptance.
Further reading
6 major banks join forces! South Korea will test CBDC payments in supermarkets, challenging traditional settlement systems
India’s CBDC will be trialled! The cooperation of 16 banks will affect inclusive finance for 5 million users?
BIS big survey! Central banks of various countries are beginning to plan digital currencies, but are there still big problems with CBDC?
