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CFA Institute Reveals Emerging Markets Support the Creation of CBDCs More than Developed Ones

With the Bank of England (BoE) discussing the creation of a ‘digital pound’, a new survey released by the CFA Institute, the global association of investment professionals, has found limited understanding of and support for central bank digital currencies (CBDCs) within the investment industry.

The CFA Institute Global Survey on Central Bank Digital Currencies found that only 46 per cent in the UK (and 42 per cent globally) believed that central banks should launch CBDCs, with respondents citing several concerns about their application.

Among UK respondents who opposed launching a CBDC, the top reason cited was a belief that their introduction does not currently address a compelling need (49 per cent) – something that UK policymakers themselves have raised. This was followed by the view that other innovations are already improving payment mechanisms without the need for a CBDC (35 per cent) and concern over data privacy risks (33 per cent). Just 15 per cent of UK respondents said they had a strong understanding of CBDCs.

The survey gathered responses from over 4,000 investment professionals globally to explore the possible implications for capital markets and investment practitioners if central banks develop and launch digital versions of physical currencies.

A digital, cash-like form of payment

Less than half of UK respondents (46 per cent) support the creation of CBDCs, however, respondents in other developed markets are even more sceptical. Especially in the US (31 per cent) and Canada (38 per cent). Those in emerging markets, such as China (70 per cent) and India (66 per cent), were much more likely to be in favour. This is possibly a result of the belief that CBDCs would significantly accelerate payments and create a cash-like form of payment.

Comparing these markets underlines the divergence in attitudes across regions – 61 per cent of respondents from emerging markets favour a CBDC versus 37 per cent of those in developed markets.

Olivier Fines, CFA, head, EMEA advocacy, CFA Institute comments: “Although the likes of Bank of England have requested stakeholders’ views through various consultations and focus groups, much remains unknown about the public’s understanding of, interest in, and demand for CBDCs.

“The results illustrate a general feeling of scepticism which continues to dominate perceptions. Central banks and governments will need to run a significant education program with consumers prior and during the launch of a digital currency. Acceptance by end-users will be critical for any CBDC. However, this is far from guaranteed even in those markets which are more receptive to digital money, particularly if it fails to live up to its perceived benefits.”

Scepticism of CBDCs’ ability to improve financial stability and inclusion

Greater financial stability and inclusion are frequently cited as potential benefits of a CBDC. However, the report found a lack of consensus on whether a CBDC would enhance either.

Less than a third (32 per cent) of global respondents believe a CBDC would enhance financial stability and a similar proportion (34 per cent) felt one would likely improve financial inclusion of under-served economic sectors or populations.

Those in the UK are particularly doubtful that a CBDC could deliver on these two aspects, despite the BoE highlighting these two benefits in their proposal for a digital pound. Fewer than four in 10 (38 per cent) believe that a CBDC would improve financial stability. Even fewer (31 per cent) think a CBDC likely would improve financial inclusion.

The survey also revealed that those in emerging markets had a stronger belief in the stability benefits of CBDCs than those in developed markets (50 per cent vs. 28 per cent) and a more positive view on their impact on financial inclusion (55 per cent vs. 28 per cent).

Other key findings from the survey include:

  • The top reason cited globally in support of launching a CBDC was to accelerate payments and transfers (58 per cent).
  • Forty-eight per cent of global respondents and 55 per cent of UK respondents would use a CBDC in some capacity if it was offered.
  • Globally, a majority (55 per cent) believe that CBDCs can coexist with private cryptocurrencies, with 61 per cent of UK respondents believing the same.
  • Fifty-eight per cent of global respondents agree that private money will always be inferior in quality and security to government money.


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