The notion of central bank digital currency remains, for most Europeans, a relatively abstract concept where confusion reigns supreme. All the surveys show this. When questioned, the general public appears to be very unfamiliar with the digital euro and is generally disinterested in this project, even though the Governing Council of the European Central Bank (ECB) announced on October 18 the launch of the preparatory phase. A phase that the ECB cannot limit to its simple dialogue with economic players on the supply side. It is imperative that it explore innovative ways of dialogue with the general public and engage in bold reflection to generate an authentic desire for a digital euro among the European population.

The great confusion

The majority of European citizens have limited knowledge and understanding of the digital euro, and interest in it shows a marked disparity from one country to another, depending on generations, socio-professional groups and statuses. social. If the digital euro were to be deployed now, the first of its users would probably be a young thirty-year-old, urban, fairly well educated and engaged in working life with a good level of income. But since youth does not make up all of Europe, Europeans are not all equal in the face of the digital euro.

Among older people, and especially those over 50, awareness of a central bank digital currency already seems much more limited. When we ask some Europeans, it becomes clear that the majority of respondents have only rudimentary knowledge of central bank digital currencies in general and the digital euro in particular. Very few of them – including those described as “technophiles” – have ever heard of it or say they are truly informed. For Europeans who think they know the digital euro, even fewer are able to identify their sources of information.

European populations who are unbanked or who suffer from underbanking in their everyday lives appear even less familiar with the notion of the digital euro and show little interest due to the subject being vague and difficult to understand. A potentially high-risk situation in terms of the digital divide that is inconceivable for the ECB which does not want to leave “no one behind” with its project.

While the euro already exists in dematerialized form, confusion reigns among the general public as many do not yet clearly discern the difference between the digital euro and funds already held in bank accounts or via financial applications. The European population currently feels overwhelmed by this still vague and confusing concept. She sometimes sees it as a cryptocurrency, sometimes as a digital version of cash, meant to replace it. In fact, European citizens clearly express a need for information to better understand the advantages of these “cashless euros” compared to current payment solutions.

The why ?

Europeans would also have difficulty understanding the need for a digital euro, on the one hand because of their satisfaction with existing payment methods, and on the other hand because they already consider electronic money to be a reality. Also, when we talk about the functionalities of the digital euro, it is not surprising to see Europeans place the offline function and the possibility of transferring digital euros from person to person at the top of their priorities. The ECB therefore has every interest in natively integrating these two functionalities preferred by Europeans into its central bank digital currency project. However, surveys reveal that these two features alone may not be enough to convince people with a strong attachment to cash to switch to the digital euro. Respondents also place high importance on universal access, ease and simplicity of use, as well as speed and security as properties of digital currency in general.

Furthermore, in certain European countries (Austria, Germany), citizens still value their freedom of choice in monetary matters and payments. They are also particularly attentive to ensuring that the digital euro does not weaken commercial banks and during this debate express their very strong attachment to cash, despite the obvious decline in payments in hard currency in certain countries. countries in the Euro zone and globally in the world.

A significant number of European citizens surveyed about the digital euro remain convinced of the need to keep cash at the forefront of their needs. Their preference for cash is closely linked to its minimal cost, practicality, simplicity, control of expenses and preservation of privacy. As a result, those who value the use of cash on a daily basis are likely to be least likely to immediately adopt digital currency issued by their central bank, which they perceive as offering few advantages over banknotes and to coins in circulation. Additionally, cash supporters are less trusting of central banks, while techies and cryptocurrency holders are more likely to embrace the upcoming digital euro.

Between concerns and expectations

Europeans express concerns and questions about the introduction of the digital euro. They express a significant need for reassurance and are concerned about the ability of their elders and certain fellow citizens to adapt to new digital payment methods. Topics covered include the practical aspects of its use in everyday life or outside Europe, the implications for privacy, its economic implications and its impact on financial institutions or cash, among others.

In a way, as a backdrop, Europeans are still wondering who could ultimately benefit from the introduction of this new euro, a situation which weighs on their support for its launch. They sometimes express concerns related to an increase in control exercised by the ECB. These concerns include in particular a possible increase in political control and the risk of authoritarian excesses within their respective governments. Some fear that the digital euro could be used as a tool of surveillance and control, unlike cash, which preserves anonymity and offers unparalleled monetary freedom in transactions. However, when the digital euro is perceived as distinct from cryptocurrencies, Europeans consider the future digitalization of their currency by the ECB as synonymous with security and stability.

Some Europeans also see the digital euro as an additional instrument to reduce fraud, fight crime, tax evasion and the shadow economy. The digitization of money is also seen as a way of making financial transactions faster and easier, proof that the digital euro must also be integrated into the solutions currently deployed or studied in this area. In fact, a digital euro in circulation should logically limit the adoption of private cryptocurrencies, even those presented as stable, for daily transactions and exchanges by the general public. On the other hand, it is important to note that a majority of Europeans believe that these two forms of digital currencies will coexist in their future payment environment.

Trust and security

For the European population, the confidentiality of their future transactional data linked to the digital euro would be a major concern (Germany, Austria, Netherlands). But, looking closer, many Europeans place the security of the digital euro at the top of their priorities, sometimes relegating the confidentiality of their transactional data to second place (Italy, Spain, Portugal). Citizens say they are ready to make compromises at this level. This hierarchy of concerns reflects Europeans' increased confidence in their monetary institutions in preserving their personal data, while security remains a central issue in the adoption of digital currency.

In terms of security, Europeans express a clear preference for a central bank digital currency system based on accounts rather than a system based on digital tokens. Identified accounts are considered more secure than entirely anonymous digital devices, which could be compared to non-nominative digital bearer securities, with all the risks that this implies in the event of theft. In this context, Europeans place significantly higher trust in commercial banks and central banks as potential issuers of digital currency, while internet platforms and technology companies command the lowest level of trust in this area.

In the immediate future, the digital euro faces a serious problem of support and understanding on the part of the European population, mainly due to the confusion surrounding this new form of currency. Europeans are still struggling to fully understand its usefulness. They question its qualities compared to the traditional monetary systems in place. By launching, operationally from 1er November, the preparatory phase of its digital euro project for a period at a minimum two years, the ECB is committed to designing a central bank digital currency that meets the needs of the public, while maintaining an active dialogue with them. To carry out this ambitious undertaking, the ECB will undoubtedly have to demonstrate boldness and innovation in this high-risk dialogue, in order to generate new enthusiasm for the euro, twenty-one years after its entry in the daily lives of Europeans.

This article is based on studies and surveys of Kantar (2023), Oesterreichische Nationalbank (2022), CFA Institute (2023), Nederlandsche Bank (2021), Official Monetary and Financial Institutions Forum, 2020, Deutsche Bundesbank (2021), European Central Bank (2021), McKinsey (2023), The Economist (2022).

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