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What Would it Take to Get Users Onside With CBDCs for Everyday Use?

In recent years, digital currencies have been all the rave. However, the idea that digital assets are exclusively some form of currency is slowly falling by the wayside as different use cases are emerging and being rapidly adopted. This May, The Fintech Times is looking to showcase some of these new methods and explore how the digital asset ecosystem is evolving.

Central bank digital currencies (CBDCs), digital money regulated by a country’s central bank, are currently being tested across the world. Developed and emerging markets alike are considering the possibility of introducing CBDCs.

But even as the world’s countries remain serious about digital currencies becoming a real possibility, one thing remains unclear: why do we even need them?

The potential use cases and benefits for users are hazy at best. Yet many central banks have already actioned plans to introduce them. Nigeria’s eNaira can hardly be considered a huge success, as it failed to encourage significant levels of adoption.

With this in mind, we asked industry leaders what it would take to get users onside with CBDCs and use them day-to-day.

Addressing privacy concerns

Promoting CBDCs with a range of benefits aside, most consumers are concerned about privacy issues, says Andrew Carrier, member of the executive committee at blockchain finance firm Quant.

Andrew Carrier, member of the executive committee at Quant
Andrew Carrier, member of the executive committee at Quant

“Privacy remains one of the most important discussion points in the CBDC debate, with the likes of the European Central Bank confirming that it is working on state-of-the-art security measures to ensure privacy protection.

“Many central banks have also stated that consumers will be able to use CBDC offline, offering cash-like privacy to users, where personal transaction details would only be known to the payer and the payee.

“While a certain level of apprehension around this new form of money is to be expected, we must remind ourselves that this is often the case whenever we experience significant change. If we cast our minds back to when bank cards were first introduced, we witnessed similar hesitation then too. This may mean that, initially, acceptance of the retail CBDC is gradual.

“But regardless, it’s crucial that central banks continue to uphold the highest levels of privacy throughout future stages of development if they want to gain consumer trust and encourage widespread adoption.”

Offering companies more options

Riccardo Tordera, head of policy and government relations for the Payments Association, discusses the benefits a CBDC could bring to the UK.

Riccardo Tordera, CBDCs
Riccardo Tordera, head of policy and government relations at the Payments Association

“Once the UK adopts a CBDC, TPA will be key to ensure that end-users and industry players will use it in day-to-day transactions.

“This country benefits from an extremely well-developed financial services industry, ranging from multi-billion dollar international banks to small fintech startups. We also have a burgeoning blockchain finance scene, with companies building expertise in creating all-digital financial ecosystems. Doing so would bring more people into digital finance, make in-store and online transactions quicker and more secure, and facilitate faster cross-border payments.

“We also see great progress being made in the stablecoin space, which often crosses over with CBDCS. The Bank of England and the Financial Conduct Authority have both completed consultations on how stablecoins can work in practice and the UK government will use the conclusions of those consultations to issue legislation within six months. This could mean that UK companies will have far more options when transferring funds or creating new ways to pay, and this greater level of flexibility will be a major benefit to UK companies.”

CBDCs must be ‘truly compelling’

Brett Hillis is a partner at international law firm Reed Smith and a member of On Chain, Reed Smith’s dedicated crypto and digital assets group. He explains

Brett Hillis, partner at Reed Smith, CBDCs
Brett Hillis, partner at Reed Smith

“Public interest in a CBDC is very much alive which was reflected by the 50,000 responses to the Bank of England’s Consultation Paper on the digital pound. The biggest concerns for users relate to their privacy and access to cash.

“The last 15 years have been spent shoring up confidence in traditional finance, and for users to look past this a truly compelling CBDC must be put forward. The proposals as they stand are not yet where they need to be to adequately allay these fears.”

Aki Balogh, co-founder and CEO of DLC.Link, a Bitcoin self-wrapping solution, also explains the importance of CBDCs offering advantages over existing options.

“For CBDCs to become widely used in daily transactions, governments must ensure they are secure and offer clear advantages over existing digital payment methods, such as lower fees or improved transaction speeds.

“Public education campaigns and incentives might be necessary to overcome scepticism and familiarise users with the benefits and operation of digital currencies issued by central banks. Until then, popular tokens USDC and USDT will continue to dominate the stablecoin landscape.”

Ensuring education and familiarity
Adam Simmons, chief strategy officer at RDX Works, CBDCs
Adam Simmons, chief strategy officer at RDX Works

“Just with internet banking and mobile banking, the key will be education and familiarity,” explained Adam Simmons, chief strategy officer at RDX Works, a decentralised network enabling developers to build without the threat of exploits and hacks.

“However, CBDCs are far from a foregone conclusion at this stage with many legitimate questions on the risks and benefits of various potential implementations of CBDCs vs other asset tokenisation, or even collateralised stablecoins such as USDC.

“It is likely that we will see real-world assets, from equities to commodities to real estate, tokenised and utilised within decentralised finance before the conversation moves to day-to-day use of CBDCs.”

Ryan Lee, chief analyst at Bitget Research, also discusses the importance of familiarity and explains the importance of promotion for any newly launched CBDC.

“The normalisation of CBDCs will primarily be driven by national-level policies, with the extent and efficiency of their promotion directly impacting their coverage.

“For countries and regions accustomed to cash payments and app-based mobile payments, early incentives or subsidies for CBDC usage may be essential promotional tools. Additionally, conducting pilot projects for salary payments to government employees in the form of CBDCs could also be one of the measures to advance the mainstream adoption of CBDCs.”

Focusing on regulation

Finally, Leo Goriev, CEO and founder of IT consulting and implementation company Alty, said: “To garner user support for CBDCs and encourage their day-to-day usage, several factors need consideration. In the past year, I’ve found regulatory innovations, such as the creation of Bitcoin ETFs, to be particularly noteworthy.

“While technological advancements are undoubtedly important, they may not significantly alter the global penetration of cryptocurrency. Thus, focusing on regulatory measures and ensuring user-friendly policies may be more effective in fostering CBDC adoption and usage among the public.”


  • Tom joined The Fintech Times in 2022 as part of the operations team; later joining the editorial team as a journalist.

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