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A CFA Institute's report analysed the opinions of a survey of a large subset of prospective CBDC end-users to predict the market for these digital currencies issued by central banks.
It is based on responses from CFA institution members all around the world.
"We found limited understanding of and support for CBDCs," noted the CFA Institute. "Only 13% said they had a strong understanding of CBDCs," said the report.
Out of more than 4,150 participants, just 42% agreed that CBDCs should be introduced, according to the study conducted by the CFA Institute, a global organisation of bankers, investors, and financial leaders.
"While many of the current studies on central bank digital currencies (CBDCs) focus on the preferences of central banks - the 'push', our survey explores the demand side of this debate – the 'pull'," said the report.
"We found limited understanding of and support for CBDCs. A global plurality of 42% of respondents believe that central banks should launch CBDCs, while 34% disagreed and nearly one in four, or 24% (of respondents) expressed no opinion," showed the report.
The Bahamas and Nigeria are among several nations that have started using CBDCs, and another 86 central banks, accounting for 93% of the global economy, are already exploring CBDCs.
Blockhead
But the CFA Institute's report showed even among affluent and financially savvy group members of the CFA institution, more is needed to know about CBDCs.
The survey showed that one of the most common arguments favouring introducing a CBDC was the potential to speed up monetary transactions across all marketplaces.
But there was also "a general feeling of scepticism" about CBDC's potential advantages, said the report, particularly in rich nations where individuals can already make instant payments and transfers online using their mobile phones.
Developing Economies Keen
Respondents from developing economies were more likely than those from established countries to express support for a CBDC - 61% vs. 37%.
Only 31% of respondents in the US backed the introduction of a digital dollar, while 38% did so in Canada, 45% in the EU, and 46% in the UK.
The support percentage was 66% in India, which plans to introduce an e-rupee next year, and 70% in China, where the People's Bank of China is now undertaking the world's largest CBDC trial project.
The report showed there is a chasm that cannot be ignored.
In emerging markets, there is a common belief that a CBDC may address a need that does not exist in more industrialised nations.
"Global averages can obscure significant differences across geographic regions, levels of economic development, and age of respondents," said the CFA study.
"The survey found significantly greater receptivity to CBDCs among younger respondents, those in the Asia-Pacific region, developing economies, and China and India. Developing markets placed greater emphasis than those in developed economies on the role of CBDCs in enhancing financial inclusion."
Scepticism Remains
Bank of England Governor Andrew Bailey previously expressed scepticism regarding CBDCs but supported the need for innovation, saying, "...question is whether there is a future for enhanced digital money? The precise answer is that we don't know, but then we never know the answer to this question precisely for new innovations; that's the whole point about innovating."
"In my view, more likely than not, the answer is yes, there is a future for digital money. Moreover, we must avoid a failure of imagination. The inability to specify a very precise, detailed use case today is not a good reason to believe there will never be one. There are stories of scepticism around the benefits to be expected from the iPhone, and going further back, railways."
Nearly half of those who responded negatively to the UK survey said they didn't support forming a CBDC because they didn't think it would solve any pressing problems.
Cybersecurity Fears
Cybersecurity attacks were the number one worry of CBDC users worldwide; about 69% of respondents cited that as a top risk.
Sixty-four per cent of those polled in developed markets and fifty-seven per cent in emerging countries cited data privacy as a top issue.
The degree to which one backs or opposes CBDCs is likewise connected with age.
The study indicated that just 26% of those under 30 were against them, while 37% of those over 55 were against them.
Like other crypto assets, the younger you are, the more likely you are to embrace a CBDC, showed the report.
The issue is whether this trend will level off or if attitudes will change as people become older.
Cryptocurrencies vs. CBDCs
BoE Governor Andrew Bailey had called cryptocurrency investments an "extremely speculative" gamble.
Bailey clarified that Bitcoin and other cryptocurrencies do not fit the criteria to be recognised as money and are instead better categorised as "extremely speculative investments."
During his address at last week's Financial and Professional Services Dinner in London, Bailey argued that improved digital money was the future of money rather than cryptos.
But the CFA survey showed CBDCs were widely regarded as compatible with public and private cryptocurrencies.
Although the study also suggested that there was a contrast between the responses.
"This points to some dichotomy in results. While a large majority agrees that public trust in fiat money is suffering because of monetary policy, a solid majority also believes that private money will always be inferior to government money," said the report.\
