The Reserve Bank of Australia (RBA) has released a comprehensive study scrutinizing the perceptions and prospects of a retail central bank digital currency (CBDC) among Australians. The research explored the willingness to pay for the use of CBDC in a digital wallet and the potential privacy benefits it might offer. The findings indicate limited public support for a retail CBDC in Australia, shedding light on the intricate dynamics of consumer preferences and attitudes towards digital currency and financial privacy. This study provides valuable insights into the potential challenges and considerations associated with the introduction of a retail CBDC in the Australian financial ecosystem.
The Reserve Bank of Australia (RBA) recently conducted a thorough examination of the perceived value Australians would place on a retail central bank digital currency (CBDC). The study delved into the willingness to pay for the use of CBDC in a digital wallet and the privacy benefits that such a currency might offer to the public. This comprehensive research sheds light on the sentiments and preferences surrounding the potential introduction of a CBDC in the Australian financial landscape.
Australians wouldn’t value retail CBDC for its privacy or safety, RBA finds
The Reserve Bank of Australia (RBA) has carried out an in-depth evaluation of the anticipated utility and reception of a retail central bank digital currency (CBDC) within the Australian populace. The study specifically focused on the public's willingness to embrace CBDC through the payment for its usage in a digital wallet and the potential privacy advantages it might offer. The RBA defined the hypothetical CBDC as a "digital currency that is even safer and potentially more private than commercial bank deposits" and utilized a discrete choice experiment to gauge public valuations of goods without traditional markets.
RBA Study Overview
The research took into consideration the willingness to pay for privacy and safety options of up to 5 Australian dollars (AUD), equating to approximately 3 U.S. dollars. As part of this examination, the RBA revealed that users paying 5 AUD per year would generate about 100 million AUD in fees, an amount deemed insufficient to "overwhelm the range of other considerations relevant to the CBDC issuance decision." Throughout the analysis, the safety value of a CBDC was underscored, emphasizing its absence of credit risk inherent in bank deposits that might be subjected to the possibility of bank failure.
Moreover, the report highlighted a significant finding based on data from 2022, where the RBA demonstrated that the willingness to hold an account with the RBA instead of a commercial bank yielded a negative inclination. This implies that individuals would be willing to pay less than an Australian dollar per year to avoid holding an account with the RBA. The research attributed this resistance to the perception of bank deposits in Australia as a safe form of money, as well as the availability of physical cash issued by the Reserve Bank of Australia as an alternative financial option.
The study further delved into public resistance to CBDC, recognizing that the survey assumed the use of a disintermediated system in which the RBA would open accounts for members of the public. Notably, the majority of live and trial CBDCs are intermediated and utilize the services of a financial institution to provide services for CBDC users. The report underlined that some policymakers anticipate designing an intermediated CBDC, which would inherently offer different privacy options.
Privacy Concerns and Data Implications
In exploring privacy data, the study encountered a complex landscape, drawing on previous research which suggested that people highly value privacy but often forgo privacy measures in practice, posing challenges in assessing its true value. When evaluating the results, the study demonstrated a strong preference for sharing information with the financial crime authority, Australian Transaction Reports and Analysis Centre, and a commercial bank. This preference was deemed to hold a value of approximately 5 AUD higher than allowing data sharing with the RBA.
Anticipated Public Support for Retail CBDC
In conclusion, the study revealed little public support for the introduction of a retail CBDC. This finding stands in contrast to numerous previous RBA studies of CBDC, most of which yielded positive conclusions, primarily focusing on wholesale CBDC use cases.
The RBA's extensive analysis unveils critical insights into the public sentiment towards a retail CBDC, emphasizing the nuanced perspectives surrounding privacy, safety, and the overall uptake of digital currency within the Australian context. This study's findings are poised to inform and shape discussions around the prospective introduction of a retail CBDC, offering nuanced perspectives for policymakers, financial institutions, and the broader public to consider.
(DEREK ANDERSEN, COINTELEGRAPH, 2024)