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Consumer demand for central bank digital currency as a means of payment

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  • Nocciola, Luca
  • Zamora-Pérez, Alejandro

Abstract

What factors could drive transactional demand for central bank digital currency (CBDC)? We analyse payment survey data to arrive at a framework for understanding the role of adoption frictions and design strategies in shaping CBDC demand. The results of our analysis show that, while consumers may initially prefer to use more traditional payment methods, a design tailored to their specific needs could significantly increase CBDC uptake. Raising awareness and capitalising on network effects could also boost demand for CBDC. JEL Classification: E41, G32

Suggested Citation

  • Nocciola, Luca & Zamora-Pérez, Alejandro, 2024. "Consumer demand for central bank digital currency as a means of payment," Research Bulletin, European Central Bank, vol. 122.
    • Handle: RePEc:ecb:ecbrbu:2024:0122:
    Note: 2600378
    as

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    References listed on IDEAS

    as
    1. Benjamin M. Friedman, 1999. "The Future of Monetary Policy: The Central Bank as an Army with Only a Signal Corps?," International Finance, Wiley Blackwell, vol. 2(3), pages 321-338, November.
    2. Kim Huynh & Jozsef Molnar & Oleksandr Shcherbakov & Qinghui Yu, 2020. "Demand for Payment Services and Consumer Welfare: The Introduction of a Central Bank Digital Currency," Staff Working Papers 20-7, Bank of Canada.
    3. Benjamin M. Friedman, 1999. "The Future of Monetary Policy: The Central Bank as an Army With Only a Signal Corps," NBER Working Papers 7420, National Bureau of Economic Research, Inc.
    4. Michael Woodford, 2000. "Monetary Policy in a World Without Money," International Finance, Wiley Blackwell, vol. 3(2), pages 229-260, July.
    5. repec:bla:intfin:v:2:y:1999:i:3:p:321-38 is not listed on IDEAS
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    More about this item

    Keywords

    CBDC; money demand; payments; random utility; structural model;
    All these keywords.

    JEL classification:

    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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