The Deutsche Bundesbank conducted a ground-breaking survey that found that Germans were generally receptive to the idea of a digital Euro.
This interest in Central Bank Digital Currency (CBDC) offers a critical chance to modernize the European financial landscape and suggests a change in public perception of digital assets.
Research Shows That Despite Banking Stress, 86% of Germans Are Open to Digital Euro
According to a survey conducted by the Bundesbank with over 6,000 participants, almost half of the participants are "keen" to use a digital Euro even in the absence of interest returns as a motivator. This is especially noteworthy in Germany, a country that has long been associated with a strong preference for cash transactions.
The research also compares asset allocation between cash, commercial bank deposits, and the proposed digital Euro, examining the hypothetical behavior of German customers under normal and stressful banking conditions.
A startling 86% of participants indicated that they would be receptive to embracing the digital currency if given a CBDC that is either non-remunerative or offers at least the same interest rate as bank savings, according to the research.
There are significant ramifications for the financial industry. When a non-remunerative CBDC is introduced, the group inclined to use it may suffer an average fall in cash holdings of 14% and a reduction in bank deposits of 27%.
CBDC Effect on Banks and Economy Is Predicted by a Bundesbank Model
Furthermore, in the event of fictitious banking instability, more than half of the participants expressed a predisposition to convert their commercial bank savings into digital Euro. This inclination increased upon discovering the enhanced security of money backed by central banks.
By developing a structural macroeconomic model to examine the relationship between CBDC, financial stability, and economic wellbeing, the study conducted by the Bundesbank also makes a theoretical contribution.
This concept is essential because it illustrates how quickly and gradually traditional banking could give way to CBDC. It sheds light on the wider implications for policymaking and financial stability. Essentially, the Bundesbank's findings highlight the necessity for careful thought in CBDC policy design to safeguard financial stability, as well as the strong interest that Germans have in a digital Euro.
April 2024, Cryptoniteuae