CBDC, Trust in the Central Bank and the Privacy Paradox

Koziuk Viktor (), Ivashuk Yurii and Hayda Yurii
Additional contact information
Koziuk Viktor: West Ukrainian National University, Ternopil, Ukraine
Ivashuk Yurii: West Ukrainian National University, Ternopil, Ukraine
Hayda Yurii: West Ukrainian National University, Ternopil, Ukraine

Economics, 2024, vol. 12, issue 2, 219-242

Abstract: Privacy/anonymity of digital transactions is an issue that potentially may affect demand for central bank digital currency. Does discussions about privacy paradox related to CBDC? In this paper, basing on the respondent’s survey, we construct indexes of privacy preferences (in general, in digital and financial environment) to identify relations between stated preferences in different contexts and between choice toward anonymity vs functionality of CBDC, trust to central bank as CBDC issuer and its independence as a precondition to guaranty anonymity of transactions. We find that generally respondents demonstrate consequence of preferences in terms of, what we call, general privacy, privacy in digital and financial environment. Distribution of obtained 3 indexes demonstrates some differences. Probit model also demonstrates that relation between choice toward anonymity over functionality of CBDC and level of 3 indexes is modest. Where is no correspondence between choice toward anonymity over functionality and trust in central bank and its independence. However, respondents demonstrate high level of trust in central bank ability to guaranty anonymity of transactions and view independence as supporting it even opting functionality over anonymity. We reach a conclusion that some weak form of privacy paradox is exist, central banks, promoting CBDC, should stress on functionality of it. However, privacy should not be ignored. It is better to have it as “nice bonus” to functionality of CBDC.

Keywords: central bank digital currency; digital money; anonymity of transactions; CBDC design; privacy paradox (search for similar items in EconPapers)
JEL-codes: E41 E42 E51 E58 G20 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.2478/eoik-2024-0025 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:vrs:econom:v:12:y:2024:i:2:p:219-242:n:1012

DOI: 10.2478/eoik-2024-0025

Access Statistics for this article

Economics is currently edited by Stelios Bekiros

More articles in Economics from Sciendo
Bibliographic data for series maintained by Peter Golla ().