Despite 94% of central banks worldwide exploring the use of central bank digital currencies (CBDCs), consumer adoption remains low, according to a survey conducted by Deutsche Bank. The bank surveyed 4,850 consumers across Europe, the U.K., and the U.S. in March and July 2024.
The survey found that cash continues to be a preferred payment method, with a majority of respondents expressing a preference for debit or credit cards over CBDCs. Additionally, 44% of respondents indicated a preference for cash over central bank digital currencies.
While the COVID-19 pandemic accelerated the shift toward digital payments, particularly among Gen Z, cash is not expected to disappear anytime soon. Analysts Marion Laboure and Sai Ravindran noted that 59% of consumers believe cash will always remain relevant.
CBDCs, which are digital forms of fiat currencies issued by central banks, are seen as a potential alternative to traditional payment methods. However, the survey revealed that only 16% of respondents believe CBDCs will become mainstream. Furthermore, 31% of respondents expressed a preference for central bank-backed cryptos over private versions.
Privacy concerns emerged as a significant barrier to CBDC adoption. 21% of U.S. respondents believed that a general cryptocurrency would offer better privacy than a government-backed one. In Europe, a higher percentage of consumers preferred cash due to its anonymity compared to the U.K. and the U.S.
Deutsche Bank highlighted the increasing focus of central banks on wholesale applications of CBDCs, citing recent initiatives by the Swiss National Bank, European Central Bank, and Federal Reserve Bank of New York. These initiatives suggest that central banks are exploring the potential benefits of CBDCs in interbank settlements and other wholesale transactions.
Overall, the survey findings indicate that while central banks are actively exploring CBDCs, consumer adoption remains limited. Factors such as privacy concerns, preference for cash, and the perceived benefits of traditional payment methods continue to pose challenges for the widespread adoption of CBDCs.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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