The possible introduction of a digital euro has been the subject of intensive debate in specialist circles for some time now. The discussion has been slow to trickle down to consumers, however, as revealed by the findings of a representative study presented in the Bundesbank’s current Monthly Report. 77% of participants surveyed in April 2021 had never heard of the digital euro before. A follow-up survey at the end of July found that awareness of the digital euro had already grown significantly, with 44% of respondents saying that they had heard of it. The Bundesbank’s experts take this as a sign that attitudes and perceptions surrounding the digital euro could yet change as time goes by and the general public becomes more informed.

A digital euro would be a digital form of central bank money, specifically the euro. As things stand today, central bank money comprises cash in circulation and deposits in central bank accounts. A digital euro could be used by the general public in much the same way as cash, only in virtual form. Alongside cash, the Eurosystem would thus supply households with an additional form of central bank money that can be used quickly, easily and securely. July 2021 saw the ECB Governing Council decide to launch the investigation phase of a digital euro project. The decision as to whether a digital euro will actually be introduced will not be made until that investigation phase is complete.

The digital euro and data protection – a wealth of potential

“The low familiarity with the digital euro could be one of the reasons why the vast majority of interviewees were still sceptical about the prospect of one being introduced,” the report points out. Just 13% of those asked were in favour of the introduction of a digital euro. Among those who had some prior knowledge of the digital euro, that figure stood at 22%.

A digital euro would be a technological innovation whose exact design – assuming it is introduced – has not yet been specified. In order to nevertheless find out more about the general public’s design preferences, the Bundesbank additionally conducted 40 qualitative guideline interviews in March and April 2021 with individuals in Germany where respondents were invited to comment on the digital euro using their own words. For this purpose, a group of respondents was selected who were heterogeneous in terms of their payment behaviour and attitude towards digitalisation as well as with regard to their age and gender. The survey lasting just under an hour began by gradually introducing the topic to the participants.

An assessment of their responses revealed that most respondents in the qualitative study expect a digital euro to meet broadly the same requirements as traditional cashless payment instruments. Summarising the survey findings, the Bundesbank’s economists write: “According to the respondents, the most important characteristics of a digital euro include free and simple use, privacy, security with regard to data protection and universal usability.” Respondents see a digital euro as offering a wealth of potential when it comes to data protection in particular, and also regard the possibility of avoiding private payment service providers as a key characteristic of the digital euro.

Digital euro seen as complementing cash, not replacing it

Current payment behaviour and behaviour routines also have a major bearing on preferences for a digital euro. In particular, respondents with a strong preference for cash payments are more sceptical about the digital euro. The analysis shows that respondents see a digital euro more as something that will complement cash than replace it outright. This reinforces the Eurosystem’s intention to offer the digital euro alongside and not instead of cash, should a decision be taken to launch it. “The studies carried out underscore how important it is to factor consumer opinion into future discussions surrounding the potential characteristics of a digital euro,” the report continues. “Therefore, the additional benefits that a digital euro offers over existing payment instruments need to be clearly communicated for a launch to be a success.”