The CFA Institute, a non-profit organization behind the Chartered Financial Analyst certification, has released its findings on a central bank digital currency (CBDC) survey from its members.
The report, spanning multiple countries, identified several trends associated with CBDC developments based on geography and age demographics. The survey was sent to 90,443 CFA Institute members, with 34% opposing the launch of CBDCs.
A global survey of our members shows support for #CBDCs is limited. Only a small percentage of respondents have a strong understanding of CBDCs & a split in attitudes between emerging & developed economies, there is no guarantee of public acceptance https://t.co/SD3x0kKqPY pic.twitter.com/O4oWmcUp2w
— Margaret Franklin, CFA, CEO at CFA Institute (@CFAInstituteCEO) July 26, 2023
Only 42% of respondents supported the launch of CBDC, with the report noting a higher concentration of the figure in emerging markets. From this, countries in the Asia-Pacific region showed the greatest support for launching CBDCs, while advanced economies continue to eye the offering with great skepticism.
Respondents from India and China backed the launch of digital versions of their fiat currencies en masse on the grounds of improving financial inclusion and cross-border transactions. Conversely, most U.S. respondents rejected the ideas of CBDC, citing privacy and surveillance concerns as the main reason for their opposition.
“In all markets, the top reason cited to support launching a CBDC was to accelerate payments and transfers,” the report read. “The chief concerns focused on three issues: cybersecurity and fraud, data privacy, and lack of use cases.”
The survey noted that age demographics play a larger role in CBDC reception, with older financial professionals above 45 more likely to oppose the launch of CBDC.
While central banks around the world are focused on programmable CBDCs and automation, the use case ranks in fifth place. Most respondents believe that CBDC peer-to-peer (P2P) transactions and clearing and settlement functionalities are priority use cases for CBDCs.
Just over 50% of respondents say that CBDCs can coexist with digital currencies without major disruptions to the financial system. However, only 10% argue that the launch of CBDCs may adversely affect commercial banks’ deposits.
In conclusion, the CFA Institute noted that “acceptance by end-users will be critical for any CBDC.” Fines added that governments keen on launching CBDCs should earn the public’s trust via transparent reporting and regular interface with citizens.
Global march toward CBDCs
Currently, over 100 central banks are probing into CBDCs, with the International Monetary Fund (IMF) predicting that 15 countries could roll out their offerings before 2030.
In light of the incoming CBDCs, the IMF has moved to publish a handbook offering technical assistance to central banks interested in rolling out CBDCs. The handbook is part of a grand plan to create uniform standards for global banking regulators experimenting with CBDCs.
Both the G20 and G7 nations are also inching toward the launch of guidelines for member countries looking to launch their versions of CBDCs.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
Watch: Blockchain provides perfect foundation for CBDC
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