Australians don’t value the privacy or security of a retail CBCC, the RBA found.

The Reserve Bank of Australia (RBA) has examined the value the public places on retail central bank digital currency (CBDC). He looked at the willingness to pay for the use of CBCC in a digital wallet and the privacy benefits that CBCC can offer.

The RBA described the hypothetical CBCC as “a digital currency that could be safer and more private than commercial bank deposits” and conducted a separate selection experiment to assess public appreciation of non-marketable assets.

The study considered up to 5 privacy and security options, equivalent to $3 USD. He added that users paying AUD 5 a year would generate about AUD 100 million in fees – “not enough to account for other considerations relevant to the decision to withdraw from CBC”.

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The value of CBDC security lies in the lack of credit risk inherent in bank deposits, as banks can fail. Using data from 2022, the RBA was able to show that willingness to hold an account with the RBA is more negative than with a commercial bank – people would be willing to pay (less than one Australian dollar per year) not to do so. According to the RBA:

This means that bank deposits in Australia are considered a safe form of money and physical cash issued by the Reserve Bank of Australia will continue to be available as an alternative.

Public opposition to the CBCC could color those findings, the RBA said. The study assumed that the RBA would use a decentralized system of opening accounts for members of the public. Most of the live and pilot CBCs are medium and make us a financial institution service to provide services to CBCC users. The report indicated that some policymakers expect to design an intermediate CBDC that could have different privacy options.

Privacy information was very complicated. Previous studies have suggested that people value privacy highly, but frequently leave privacy measures in practice, making it difficult to assess its value. The results showed a strong preference for sharing data with the Financial Crimes Authority's Australian Transaction Reports and Analysis Center and a commercial bank, about 5 AUD more than allowing sharing data with the RBA.

In short, the study found little public support for retail CBDC. The RBA has previously conducted several studies on CBDC, most of which have come to positive conclusions. Those studies mainly looked at mass CBCC use cases.

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