The Reserve Bank of Australia (RBA) has conducted an analysis of the perceived value of a retail central bank digital currency (CBDC) among the public. The assessment focused on the willingness to pay for the use of CBDC in a digital wallet and the potential privacy benefits it could provide.
The RBA described its hypothetical CBDC as a digital currency that offers even greater safety and privacy than commercial bank deposits. To gauge public valuations of goods without markets, a discrete choice experiment was employed.
According to the research, fees for privacy and safety options were considered up to 5 Australian dollars (AUD), which is approximately $3 U.S. dollars. The study also stated that if users were to pay 5 AUD per year, it would generate around 100 million AUD in fees. However, this amount was deemed insignificant and would not overshadow the various other factors influencing the decision to issue a CBDC.
Furthermore, the safety aspect of a CBDC lies in its lack of credit risk, which is inherent in bank deposits due to the possibility of bank failures. Drawing on data from 2022, the RBA demonstrated that people showed a negative willingness to hold an account with the RBA instead of a commercial bank, indicating that they would be willing to pay less than one Australian dollar per year to avoid it. The RBA stated that public resistance to CBDC could have influenced these findings. The survey assumed the use of a disintermediated system, where the RBA would directly open accounts for the public. Most existing and trial CBDCs are intermediated and rely on the services of financial institutions to cater to CBDC users. The report mentioned that some policymakers anticipate designing an intermediated CBDC, which would offer different privacy options.
Privacy-related data proved to be more complex. Previous research has indicated that people highly value privacy but often overlook privacy measures in practice, making it challenging to assess its actual value. The obtained results indicated a strong preference for sharing information with the Australian Transaction Reports and Analysis Centre (a financial crime authority) and a commercial bank, which was valued at approximately 5 AUD more than allowing data sharing with the RBA.
In summary, the study found minimal public support for a retail CBDC. The RBA has conducted multiple previous studies on CBDC, most of which yielded positive conclusions. However, these studies primarily focused on wholesale CBDC use cases.
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