Consumers need compelling reasons to use central bank digital currencies

THE successful launch of a central bank digital currency (CBDC) in an economy with existing sophisticated payments infrastructure is going to require a compelling reason if consumers are to overcome their reluctance and use it.

For all the pilot programmes on digital currencies conducted by central banks, all the sandboxes run by fintech companies and all the thousands of words devoted to describing the benefits of a new CBDC ecosystem, there is little evidence of the killer incentive that will produce the “I must have one of those” moments among consumers.

Public resistance to digital currencies

CBDC proponents will argue that consumers often do not know that they really need or want something until they actually own it. Had Henry Ford conducted extensive research prior to launching the Model T, he would have been told that it was not required because people already had horses.