The Reserve Bank of Australia (RBA) has conducted a study to determine the value the general public would place on a retail central bank digital currency (CBDC). The study examined the willingness of individuals to pay for the use of a CBDC in a digital wallet, as well as the potential privacy benefits it could offer.
The RBA described its hypothetical CBDC as a digital currency that is even safer and potentially more private than commercial bank deposits. To assess public valuations of goods without markets, the RBA used a discrete choice experiment.
The research considered fees for privacy and safety options of up to 5 Australian dollars (AUD), which is equivalent to approximately $3 USD. It was noted that users paying 5 AUD per year would generate around 100 million AUD in fees, which is not a significant enough amount to outweigh other factors relevant to the decision to issue a CBDC.
In terms of safety, a CBDC offers an advantage over bank deposits as it eliminates credit risk, which is inherent in commercial banks that can fail. Using data from 2022, the RBA demonstrated that individuals have a negative willingness to hold an account with the RBA instead of a commercial bank. In fact, people would be willing to pay less than one AUD per year not to hold an account with the RBA.
The findings also highlighted the potential impact of public resistance to a CBDC. The survey assumed the use of a disintermediated system where the RBA would directly open accounts for the public. However, most existing and trial CBDCs are intermediated and utilize the services of a financial institution. The report noted that policymakers are considering an intermediated CBDC, which would offer different privacy options.
The assessment of privacy data proved to be more complex. Previous research has shown that people value privacy highly but often compromise it in practice, making it challenging to determine its true worth. The results indicated a strong preference for sharing information with the Australian Transaction Reports and Analysis Centre and a commercial bank, which was valued at approximately 5 AUD more than allowing data sharing with the RBA.
In conclusion, the study revealed limited public support for a retail CBDC. The RBA has conducted several previous studies on CBDCs, most of which have reached positive conclusions. However, these studies primarily focused on wholesale CBDC use cases.