A recent survey conducted by the Deutsche Bundesbank revealed that a large majority of Germans are receptive to the idea of introducing a central bank digital currency (CBDC), also known as the digital euro in the European Union.
Germany's central bank shared the results of the survey in a discussion paper, which collected responses from around 6,000 participants. The survey explored how individuals would allocate their funds in various scenarios, including normal circumstances and times of banking stress.
The findings showed that many Germans are open to CBDCs, with nearly half of the respondents expressing willingness to have digital euros even without any remuneration. Surprisingly, they demonstrated similar interest in CBDCs as they did in using cash, despite the country's general preference for physical money.
Furthermore, the survey indicated a notable inclination among participants to switch to digital euros during periods of banking stress. A significant 86% of respondents showed openness to CBDC, whether in the form of holding unremunerated CBDC or converting to digital euros in times of financial strain.
The study conducted by Bundesbank also suggested that establishing appropriate holding limits for CBDC could result in welfare improvements. By setting limits, households could meet their demand for CBDC while reducing the risk of bank runs during vulnerable times.
Germany seems to be placing increased emphasis on digitalization as a possible alternative to cash, with Deutsche Bundesbank president Joachim Nagel highlighting the Eurosystem's incapacity to identify individuals based on CBDC payments. He stressed that financial institutions and payment service providers handling digital euro transactions must refrain from using personal and transaction data for commercial purposes, barring explicit consent from users.
At the 2024 DZ Bank Capital Markets Conference, Nagel emphasized the importance of safeguarding user data privacy in CBDC transactions. This comes as part of Germany's efforts to promote digital innovation in the financial sector while protecting user interests.
