What triggers consumer adoption of CBDC?

33 Pages Posted: 4 May 2021

See all articles by Michiel Bijlsma

Michiel Bijlsma

University of Amsterdam - SEO Economic Research; Tilburg Law and Economics Center (TILEC)

Carin van der Cruijsen

De Nederlandsche Bank

Nicole Jonker

De Nederlandsche Bank (DNB); De Nederlandsche Bank

Jelmer Reijerink

De Nederlandsche Bank

Date Written: April 22, 2021

Abstract


Central banks around the world are examining the possibility of introducing Central Bank Digital Currency (CBDC). The public’s preferences concerning the usage of CBDC for paying and saving are important determinants of the success of CBDC. Using data from a representative panel of Dutch consumers we find that roughly half of the public would open a CBDC current account. The same holds for a CDBC savings account. Thus, we find clear potential for CBDC in the Netherlands. This suggests that consumers perceive CBDC as distinct from current and savings accounts offered by traditional banks. Intended adoption is positively related to respondents’ knowledge of CBDC and trust in banks and in the central bank. Price incentives matter as well. The amount respondents want to deposit in the CBDC savings account depends on the interest rate offered. Furthermore, intended usage of the CBDC current account is highest among people who find privacy and security important and among consumers with low trust in banks in general. These results suggest that central banks can steer consumers’ adoption of CBDC via the interest rate, by a design of CBDC that takes into account the public’s need for security and privacy, and by clear communication about what CBDC entails.

Keywords: CBDC, consumers, public money, private money, bank accounts, trust, interest rates

JEL Classification: D12, D14, E58, G21

Suggested Citation

Bijlsma, Michiel and van der Cruijsen, Carin and Jonker, Nicole and Reijerink, Jelmer, What triggers consumer adoption of CBDC? (April 22, 2021). De Nederlandsche Bank Working Paper No. 709, Available at SSRN: https://ssrn.com/abstract=3836440 or http://dx.doi.org/10.2139/ssrn.3836440

Michiel Bijlsma

University of Amsterdam - SEO Economic Research ( email )

Roetersstraat 29
Amsterdam, 1018 WB
Netherlands

Tilburg Law and Economics Center (TILEC)

Warandelaan 2
Tilburg, 5000 LE
Netherlands

Carin van der Cruijsen (Contact Author)

De Nederlandsche Bank ( email )

PO Box 98
1000 AB Amsterdam
Amsterdam, 1000 AB
Netherlands

HOME PAGE: http://www.dnb.nl/en/onderzoek-2/onderzoekers/overzicht-persoonlijke-paginas/index.jsp

Nicole Jonker

De Nederlandsche Bank (DNB) ( email )

P.O. Box 98
Amsterdam, 1000 AB
Netherlands

De Nederlandsche Bank ( email )

PO Box 98
1000 AB Amsterdam
Amsterdam, 1000 AB
Netherlands

Jelmer Reijerink

De Nederlandsche Bank ( email )

Netherlands

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