Digital euro demand: design, individuals’ payment preferences and socioeconomic factors

Claudia Lambert, Chloe Larkou, Cosimo Pancaro, Antonella Pellicani and Meri Sintonen

No 2980, Working Paper Series from European Central Bank

Abstract: By applying a structural demand model to unique consumer-level survey data from the euro area, we assess how different CBDC design options, combined with individual (revealed) preferences, influence the potential demand for a digital euro. Estimating the demand for a digital euro, we find that if it were unconstrained, it could range, in steady state, between 3-28% of household liquid assets or €0.12 - €1.11 trillion, depending on whether consumers would perceive the digital euro to be more cash-like or deposit-like. With an illustrative €3,000 holding limit per person, it could instead range between 2-9% or €0.10 -€0.38 trillion. Privacy, automatic funding, and instant settlement raise its potential demand. JEL Classification: E41, E50, E58

Keywords: Central bank digital currency; demand estimation; design attributes; structural model (search for similar items in EconPapers)
Date: 2024-09
New Economics Papers: this item is included in nep-ban, nep-cba, nep-dcm, nep-eec, nep-eur, nep-fdg, nep-ipr, nep-mon and nep-pay
Note: 1559770
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