A new working paper from the European Central Bank (ECB) has revealed weak consumer interest in adopting a central bank digital currency (CBDC), casting doubt on the potential success of the digital euro. The study, titled “Consumer Attitudes Towards a Central Bank Digital Currency”, surveyed 19,000 respondents across 11 euro-area countries and identified significant communication barriers discouraging adoption.
When asked to hypothetically allocate €10,000 (~$10,800) across different assets, Europeans assigned only a small fraction to the Digital Euro. The report suggests that existing liquid assets, such as cash, current accounts, and savings, remain dominant in consumer preferences, leaving little room for CBDCs.
Preference for Existing Payment Methods
The study, published on March 12, highlighted that Europeans see no compelling reason to switch to a Digital Euro, given the abundance of existing offline and online payment options. This presents a major challenge for policymakers seeking to promote CBDC adoption.
“This finding also suggests that convincing some users of the value added of a CBDC might pose a challenge for policymakers, and more research will certainly be needed in this area,” the ECB report noted.
While the study found that introducing a Digital Euro would not significantly disrupt financial stability, it stressed that consumer habits pose a major obstacle to adoption.
Video-Based Education Could Boost Adoption
One key insight from the research is that targeted educational efforts could help shift consumer perception. The study found that respondents who watched a short, informative video on the Digital Euro were more likely to update their views and consider adoption.
“We find evidence that consumers who are shown a short video providing concise and clear communication about the key features of the digital euro are substantially more likely to update their beliefs about this new form of payment, which, in turn, increases their immediate likelihood of adopting it compared to an untreated control group,” the report stated.
This suggests that strategic communication and public awareness campaigns could play a crucial role in overcoming resistance to the digital euro.
Political Resistance to CBDCs Grows in the US
The ECB study comes at a time when US lawmakers are ramping up opposition to CBDCs. Speaking at a House Financial Services Committee hearing on March 11, Representative Tom Emmer argued that Congress should prioritize legislation supporting stablecoins while blocking the rollout of CBDCs.
“CBDC technology is inherently un-American,” Emmer said, emphasizing that unelected officials should not have the authority to issue such a currency. He also reintroduced the CBDC Anti-Surveillance State Act, aimed at preventing future US administrations from launching a digital dollar.
Deutsche Börse CEO Pushes for Digital Euro
Despite consumer skepticism, some European financial leaders continue to advocate for a Digital Euro. Deutsche Börse CEO Stephan Leithner recently called for a permanent digital euro to enhance the region’s financial autonomy.
As the debate over CBDCs intensifies, the ECB faces an uphill battle in convincing European consumers of the benefits of a digital euro. Whether strategic communication efforts can shift public sentiment remains to be seen.
