Valuing Safety and Privacy in Retail Central Bank Digital Currency

Zan Fairweather, Denzil Fiebig, Adam Gorajek, Rochelle Guttmann, June Ma and Jack Mulqueeney
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Zan Fairweather: Reserve Bank of Australia
Adam Gorajek: Reserve Bank of Australia
June Ma: Harvard University
Jack Mulqueeney: Reserve Bank of Australia

RBA Research Discussion Papers from Reserve Bank of Australia

Abstract: This paper explores the merits of introducing a retail central bank digital currency (CBDC) in Australia, focusing on the extent to which consumers would value having access to a digital form of money that is even safer and potentially more private than commercial bank deposits. To conduct our exploration we run a discrete choice experiment, which is a technique designed specifically for assessing public valuations of goods without markets. The results suggest that the average consumer attaches no value to the added safety of a CBDC. This is consistent with bank deposits in Australia already being perceived as a safe form of money, and physical cash issued by the Reserve Bank of Australia continuing to be available as an alternative option. Privacy settings of a CBDC, which can take various forms, look more consequential for the CBDC value proposition. We find no clear relationship between safety or privacy valuations and the degree of consumers' cash use.

Keywords: central bank digital currency; data privacy; financial safety; willingness to pay (search for similar items in EconPapers)
JEL-codes: C90 E42 E50 G21 (search for similar items in EconPapers)
Date: 2024-04
New Economics Papers: this item is included in nep-ban, nep-cba, nep-dcm, nep-fdg, nep-mon and nep-pay
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Persistent link: https://EconPapers.repec.org/RePEc:rba:rbardp:rdp2024-02

DOI: 10.47688/rdp2024-02

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