Many Germans Open to Adopting Digital Euro, Bundesbank Study

In a groundbreaking study, the Deutsche Bundesbank revealed a significant openness among Germans towards the concept of a digital Euro.

This interest in Central Bank Digital Currency (CBDC) indicates a shift in consumer sentiment regarding digital assets and presents a pivotal opportunity for modernizing the European financial landscape.

Study Reveals 86% of Germans Open to Digital Euro Amid Banking Stress

A survey commissioned by the Bundesbank and executed with approximately 6,000 participants highlights that nearly half of the respondents are “keen” to utilize a digital Euro, even without the incentive of interest earnings. Such a finding is particularly remarkable in Germany, traditionally known for its strong preference for cash transactions.

The study also delves into the hypothetical behavior of German consumers during normal circumstances and periods of banking stress, comparing asset allocation between cash, commercial bank deposits, and the proposed digital Euro.

The data reveals that if offered a CBDC that is either non-remunerative or yields at least the same interest rate as bank deposits, a staggering 86% of participants showed a degree of openness to adopting the digital currency.

Read More: What Is Markets in Crypto-Assets (MiCA)?

The implications for the banking sector are profound. Introducing a non-remunerative CBDC could see an average decline of 14% in cash holdings and a 27% reduction in bank deposits among the group inclined towards CBDC use.

Bundesbank Model Predicts CBDC Impact on Banks and Economy

Moreover, in hypothetical scenarios of banking turmoil, over half of the respondents indicated a proclivity to convert their commercial bank deposits to digital Euro, a tendency amplified upon learning about the superior safety of central bank-backed money.

The Bundesbank’s study also contributes theoretically by constructing a structural macroeconomic model to analyze the interplay between CBDC, banking stability, and economic welfare.

This model is pivotal as it reflects the potential for gradual and rapid shifts from traditional banking to CBDC. It provides insights into the broader effects on financial stability and policy formulation. In essence, the Bundesbank’s findings not only reveal a substantial interest among Germans in a digital Euro but also underscore the need for careful consideration in CBDC policy design to maintain financial stability.

Read More: A Token Economy for Europe: Considering the Opportunities

The research signals a transformative period ahead, where digital currencies could coexist with traditional money, reshaping the economic landscape in Germany and beyond.

The post Many Germans Open to Adopting Digital Euro, Bundesbank Study appeared first on BeInCrypto.