Consumers are wary about using CBDCs, despite the fact that most central banks are exploring using these cryptocurrencies, according to a survey by Deutsche Bank.
The COVID-19 pandemic hastened the shift towards digital payments, the report said
Only 16% of those surveyed thought that central bank digital currencies would go mainstream.
Consumers are still reluctant to use central bank digital currencies (CBDCs), despite the fact that 94% of central banks globally are exploring using these cryptocurrencies, according to a survey by Germany's Deutsche Bank (DB)
The bank surveyed 4,850 consumers in Europe, the U.K. and the U.S. in March this year.
Cash is not going away anytime soon, according to the survey. A majority of respondents said they would prefer to use a debit or credit card than a CBDC, and 44% said they would rather use cash than a central bank digital currency.
"While 59% of consumers believe that cash will always be relevant, the COVID-19 pandemic accelerated the shift toward digital payments, particularly among Gen Z," analysts Marion Laboure and Sai Ravindran wrote in the report published on Wednesday.
CBDCs are digital form of fiat currencies that are blockchain-based and issued by a central bank. CBDCs are managed by the issuing central bank and considered legal tend and can be used for payments.
Read more: What Is a Central Bank Digital Currency?
A mere 16% of those surveyed believed that CBDCs would become mainstream, and 31% said they preferred central bank-backed cryptos over private versions. 31% said they would prefer to use a crypto managed by a central bank or government, while only 21% said they would choose to use a private crypto like bitcoin {{BTC}}.
Privacy issues are also a concern among the participants. 21% of those surveyed in the U.S. said they believed that a general cryptocurrency would offer better privacy than a government-backed crypto. A higher number of European consumers preferred to use cash due to its anonymity, than in the U.K. and the U.S., the survey showed.
Deutsche noted that central banks are increasingly focusing on the use of CBDCs in wholesale applications, evidenced by recent initiatives that have been launched by the Swiss National Bank (SNB), the European Central Bank (ECB), and the Federal Reserve Bank of New York.
Read more: U.S. Consumers Say Crypto Is Here to Stay, Stablecoins Maybe Not: Deutsche Bank