Cash Is Still King Deutsche Bank Survey Shows

19 Sept

A recent survey conducted by Deutsche Bank reveals that a portion of consumers are hesitant to adopt Central Bank Digital Currencies (CBDCs), favouring traditional forms of payment like cash and debit or credit cards instead. Despite growing interest from central banks globally, consumer sentiment suggests that CBDCs have a long way to go before becoming mainstream.

Support Bitesize Bitcoin

The survey, which polled 4,850 consumers across Europe, the U.K., and the U.S. between March and July 2023, found that 44% of respondents would rather use cash than a CBDC, and 57% preferred debit or credit cards over digital currencies issued by central banks. Notably, only 16% of those surveyed believe that CBDCs will become mainstream in the near future.

The COVID-19 pandemic played a key role in accelerating the adoption of digital payment methods, particularly among younger generations like Gen Z. However, despite this shift, the survey highlights that many consumers remain attached to physical currency. "While 59% of consumers believe that cash will always be relevant, the pandemic has hastened the move toward digital payments," Deutsche Bank analysts Marion Laboure and Sai Ravindran noted in their report.

Consumer Concerns Around CBDCs

CBDCs, digital versions of fiat currencies issued and regulated by central banks, are seen by many governments as the future of money in a digital economy. They offer the promise of fast, secure transactions on blockchain-based platforms, and are considered legal tender. Despite these advantages, only 31% of survey participants expressed a preference for a central bank-backed digital currency over a private cryptocurrency. Bitcoin and other decentralized cryptocurrencies garnered slightly less interest, with only 21% choosing private cryptos over government-managed alternatives.

Privacy remains a critical issue for many consumers when it comes to CBDCs. The survey highlighted that 21% of U.S. respondents believed a general cryptocurrency would provide better privacy protections compared to a government-issued CBDC. European consumers showed an even stronger preference for cash, valuing its anonymity over the digital transparency inherent in blockchain-based currencies.

The Global Push for CBDCs

Despite consumer reluctance, central banks worldwide are continuing to explore and develop CBDCs. According to Deutsche Bank, 94% of central banks are researching or trialing digital currencies. The European Central Bank (ECB), the Federal Reserve Bank of New York, and the Swiss National Bank (SNB) are among the institutions that have recently launched initiatives to test CBDCs, focusing primarily on wholesale applications like cross-border payments and financial market infrastructures.

Articles