Privacy valued more than security when it comes to central bank digital currencies, RBA finds
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The news: Australians typically wouldn’t ascribe extra value to a digital currency issued by the Reserve Bank of Australia, research by the central bank has found. However they potentially would value a central bank digital currency (CBDC) with different privacy settings to those issued by commercial banks.
The context: “We discovered that Australians on average do not appear to value the fact that a CBDC would be issued by the RBA,” the research, based on the 2022 RBA Consumer Payments Survey, found.
“This is consistent with Australians having confidence that our commercial banks are well regulated and supervised, and that bank account balances are safe and well protected via the government’s deposit guarantee.”
Privacy mattered more, according to the survey. “We found that consumers do care about the number of institutions that see their transaction data and which institutions those are,” the RBA said. “Further research should consider what privacy settings could be in-built for a retail CBDC to be compatible with other policy objectives, such as the detection and prevention of financial crime.”
Central banks around the world are researching, piloting and even issuing CBDCs, but previous work from the RBA has found there is no obvious need for one in Australia, which already has an efficient payment system that is increasingly real time. However there had been concerns CBDCs, because of their greater perceived security, could drain deposits from the commercial banking system, particularly in times of stress.
The 2022 RBA Consumer Payments Survey was a large, nationally representative survey of payments behaviour in Australia.
The source: RBA research
