While several central banks across the globe are actively exploring the feasibility of launching a Central Bank Digital Currency (CBDC), a recent survey has revealed that cash will not be going away anytime soon as a majority of consumers are not enthusiastic about using those products.
The survey, conducted by Deutsche Bank, Germany’s leading investment bank, polled 4,850 respondents from Europe, the United Kingdom, and the United States. A majority of the respondents stated that they prefer conventional payment methods like cash and debit or credit cards.
Cash Reigns Supreme
According to the study, 59% of the respondents believe cash will always be useful, with 44% stating that they would prefer using cash for payments rather than CBDCs. Only a small percentage of respondents, 16%, expect CBDCs to become mainstream payment options.
Deutsche Bank analysts, Marion Laboure and Sai Ravindran, noted in the report, “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.”
Although most of the respondents were hesitant about using a CBDC, about 31% said they would rather use a cryptocurrency managed by the government than one backed by private institutions.
Privacy Concerns Remain
The survey further revealed that privacy concerns significantly affect the adoption of CBDCs. Most of the participants, especially in the U.S., believe that general cryptocurrencies offer better privacy than government-backed digital currencies. About 21% of the respondents said they preferred a private cryptocurrency like Bitcoin.
On the other hand, most European respondents showed stronger preference for cash, due to the anonymity it offers, than those in the U.S. and the U.K.
Per the survey, central banks are increasing exploring wholesale CBDC use cases, however, user skepticism remains a major issue affecting mainstream adoption. A report by the Bank of Canada revealed that 86% of Canadians are opposed to CBDCs, with a whopping 92% preferring cash over a digital Canadian dollar (CAD).