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Valuing Safety and Privacy in Retail Central Bank Digital Currency

Author

Listed:
  • Zan Fairweather

    (Reserve Bank of Australia)

  • Denzil Fiebig

    (University of New South Wales)

  • Adam Gorajek

    (Reserve Bank of Australia)

  • Rochelle Guttmann

    (Reserve Bank of Australia)

  • June Ma

    (Harvard University)

  • Jack Mulqueeney

    (Reserve Bank of Australia)

Abstract

This paper explores the merits of introducing a retail central bank digital currency (CBDC) in Australia, focusing on the extent to which consumers would value having access to a digital form of money that is even safer and potentially more private than commercial bank deposits. To conduct our exploration we run a discrete choice experiment, which is a technique designed specifically for assessing public valuations of goods without markets. The results suggest that the average consumer attaches no value to the added safety of a CBDC. This is consistent with bank deposits in Australia already being perceived as a safe form of money, and physical cash issued by the Reserve Bank of Australia continuing to be available as an alternative option. Privacy settings of a CBDC, which can take various forms, look more consequential for the CBDC value proposition. We find no clear relationship between safety or privacy valuations and the degree of consumers' cash use.

Suggested Citation

  • Zan Fairweather & Denzil Fiebig & Adam Gorajek & Rochelle Guttmann & June Ma & Jack Mulqueeney, 2024. "Valuing Safety and Privacy in Retail Central Bank Digital Currency," RBA Research Discussion Papers rdp2024-02, Reserve Bank of Australia.
    • Handle: RePEc:rba:rbardp:rdp2024-02
    DOI: 10.47688/rdp2024-02
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    References listed on IDEAS

    as
    1. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
    2. Grant Turner, 2011. "Depositor Protection in Australia," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 45-55, December.
    3. Tai Lam & Crystal Ossolinski, 2015. "The Value of Payment Instruments: Estimating Willingness to Pay and Consumer Surplus," RBA Research Discussion Papers rdp2015-03, Reserve Bank of Australia.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    central bank digital currency; data privacy; financial safety; willingness to pay;
    All these keywords.

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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