What Triggers Consumer Adoption of Central Bank Digital Currency?

Abstract

Central banks around the world are examining the possibility of introducing Central Bank Digital Currency (CBDC). The public’s preferences concerning the usage of CBDC for paying and saving are important determinants of the success of CBDC. However, little is known yet about consumers’ attitudes towards CBDC. Using data from a representative panel of Dutch consumers we find that roughly half of the public says it would open a CBDC current account. The same holds for a CBDC savings account. Thus, we find clear potential for CBDC in the Netherlands. This suggests that consumers perceive CBDC as distinct from current and savings accounts offered by traditional banks. Intended CBDC usage is positively related to respondents’ knowledge of CBDC and trust in the central bank. Price incentives matter as well. The amount respondents say they would want to deposit in the CBDC savings account depends on the interest rate offered. Furthermore, intended usage of the CBDC current account is highest among people who find privacy and security important and among consumers with low trust in banks in general. These results suggest that central banks can steer consumers’ adoption of CBDC via the interest rate, by a design of CBDC that takes into account the public’s need for security and privacy, and by clear communication about what CBDC entails.