Public Concerns Surrounding CBDCs Evident in Surveys Conducted in Canada and UK

As the debate over central bank digital currencies (CBDCs) heats up, public sentiment towards these digital monetary instruments is growing in importance. Recent studies performed by hardware wallet manufacturer Trezor and financial news site WealthRocket shed insight on Canadian and UK citizens’ misgivings about CBDCs.

According to the studies, citizens in both countries are concerned about the technology being examined by central banks and governments around the world as an alternative to physical cash. The majority of respondents in the United Kingdom were concerned about the government gaining control of their funds, while 39% of Canadians were concerned about losing control of their assets. This attitude reflects a broader skepticism about handing over unilateral control of money to the state.

Distinguishing CBDCs from Stablecoins

CBDCs, as opposed to stablecoins like Circle’s USDC or Tether’s USDT, are digital tokens held by governments or central banks. The distinction is significant because it highlights the possible control and monitoring that governments may have over CBDCs.

The surveys were timed to coincide with the end of public comment periods for CBDCs in Canada and the United Kingdom. The Bank of England has received replies to its Consultation Paper, while the Bank of Canada has completed its own consultation process. These surveys’ findings provide vital insights into public attitude as policymakers assess the viability and ramifications of CBDCs.

Conservative lawmakers in both Canada and the United States have expressed reservations about CBDCs. Critics see digital currencies as enabling excessive government control, heightening concerns about regulatory organizations’ motives. Some commentators, however, believe that the likelihood of CBDCs being implemented in industrialized economies, including the United States, is overestimated. CBDC adoption would most likely have a negative impact on financial intermediaries such as banks and fintech firms.

Concerns about fraud, cyber threats, and the potential phasing out of currency were widespread among Canadian respondents. Nonetheless, 59% of individuals polled were willing to utilize a CBDC for payments, while only 25% were completely opposed. Although the Bank of Canada does not intend to issue a CBDC immediately, it is open to investigating the technology in response to future parliamentary demands. Canadians noted potential benefits such as increased safety, convenience, and the protection of the Canadian economy’s stability.

Since 2021, the Bank of England and HM Treasury have been investigating the potential of a CBDC. Although there is no agreement on whether to pursue a CBDC or use blockchain technology, the UK central bank has referred to the digital pound, which was discussed in a recent Consultation Paper, as “digital sterling.” According to Trezor’s survey, 55% of 1,000 British respondents had heard of the digital pound.

According to the studies, there is a significant disparity in public knowledge about CBDCs, with substantially less awareness among the general population compared to individuals working in the crypto business. Respondents expressed concern about authorities having control over their cash, the expiration of CBDCs, and restrictions on the goods and services that can be purchased. The findings highlight the importance of holding broad and inclusive public debates before moving forward with CBDC implementation.

As the global debate over CBDCs evolves, governments must reflect public mood, address concerns, and maintain transparency throughout the decision-making process.