Survey Says: Europeans Not Interested in CBDC, While ECB Eyes October for Prep Phase

The European Central Bank (ECB) is moving forward to complete the preparation phase for its proposed Central Bank Digital Currency (CBDC), the digital euro, in October of this year. 

Christine Lagarde, the ECB’s President, claimed the timeline aims to ensure robust testing, stakeholder engagement, and a clear regulatory framework before any final decision is made. 

But skepticism among lawmakers is ramping up, mostly thanks to recent payment system outages that put in serious doubt the ECB’s ability to operate a digital currency efficiently. 

In February, the Target 2 (T2) payment system, which handles large interbank transactions, suffered an outage lasting nearly a full day. This incident is a cautionary tale for the lawmakers — who question whether the ECB’s digital euro could suffer from similar disruptions.

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If It Ain’t Broken, Don’t Fix it?

On top of that, a recent working paper from the ECB showed how little European consumers cared for a potential digital euro. The study surveyed roughly 19,000 individuals in 11 euro-area nations. 

Respondents were asked to allocate a hypothetical €10K (around AU$17K) among various assets, but they allocated only a small share to CBDCs, and most of them preferred cash, current accounts, traditional savings and current payment systems.

According to the findings, most consumers need a clearer explanation of how a CBDC would benefit them. The paper reads that “educational videos can change perceptions” and therefore lead to more openness toward using a digital euro, once people understand its features.

But it’s just not cutting it for them. The report notes that people already have multiple ways to pay, both offline and online, and do not see enough added value in a new option. Even though introducing a digital euro may not destabilise the financial system, most European households are hesitant. 

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When the preparation phase ends, the ECB’s Governing Council—which includes board members and heads of national central banks—will decide whether to issue the digital euro. Their decision will follow any required legislation taking effect.

The landscape is clear for Europeans, yet it’s to be seen whether the ECB will try to force the CBDC on European households and businesses. In contrast, US Fed Chair Jerome Powell promised during a Senate hearing that there would be no CBDC as long as he is in charge. 

Even US President Donald Trump outlined in an Executive Order the prohibition of central US CBDCs.