Consumer preferences for a digital euro: insights from a discrete choice experiment in Austria
Summary
Focus
Central banks worldwide are researching and developing retail central bank digital currencies as a secure, widely accepted digital payment method that complements cash. While technical implementation is within the central bank's domain, widespread consumer adoption is essential for success. Consultative processes, focus groups and surveys have provided valuable insights; however, a significant gap remains in robust, representative evidence of consumer demand for a digital euro. Understanding consumer preferences regarding the design features is crucial to ensure that a digital euro meets user needs and for efforts to establish a legal framework that complements existing payment methods.
Contribution
We use a discrete choice experiment (DCE) to uncover consumer preferences for a digital euro. The DCE simulates real-world decision-making by presenting consumers with controlled trade-offs between key attributes (privacy, security, fees, accessibility, form) and infers their underlying preferences from their choices. Using a representative sample of 1,421 Austrian residents, we quantify how different design features affect adoption intentions and identify significant heterogeneity across consumer groups. We tailored the experimental design to align with ongoing policy discussions at the European Central Bank and the European Commission, making results directly relevant for policymakers.
Findings
Under realistic design assumptions, approximately 45% of individuals intend to adopt a digital euro. Security concerns are paramount, and monetary incentives significantly drive adoption. We presented two distinct levels of data privacy: personal data and payment information can only be tracked by the participant's bank or they cannot be tracked by anyone. Our findings indicate that, without monetary compensation, consumers are on average indifferent between the levels of privacy. However, approximately one third of participants derive greater utility from enhanced privacy than from potential cost savings. Offline functionality has limited impact, while cards are preferred slightly more than smartphone apps. Adoption varies significantly by demographics, in particular age, and trust in the central bank.
Abstract
This paper examines consumers' intended adoption of a digital euro in Austria using a discrete choice experiment. We estimate a mixed logit model to quantify the role of key attributes such as privacy, offline functionality, security against financial loss, monetary incentives, and payment form factors. Our findings indicate that security and financial incentives are the strongest drivers of adoption, while respondents do not report strong preferences among the privacy options that are laid out in the experiment. We identify significant heterogeneity in adoption likelihood across socio-demographic groups. Simulations suggest that under realistic design assumptions, approximately 45% of individuals are found to have an intention to adopt a digital euro.
JEL classification: E42, D12, G21, C35
Keywords: central bank digital currency (CBDC), consumer adoption, discrete choice experiment, payment preferences