Low trust impedes digital currency plans

Negative interest rates and Europe’s faltering dream

 
Lurking in the detail of this month’s OMFIF poll on the trustworthiness of potential digital currency providers is an important headache for European policy-makers. In the three euro area countries (out of 13 worldwide) surveyed we found, perhaps unsurprisingly, pronounced net distrust among ordinary citizens in technology firms as cyber money issuers. But we also unearthed in these countries marginal distrust in central banks possibly carrying out such functions, and low or negative trust in them overall. The same ran true, to a lesser extent, for the Federal Reserve – worthy of a separate essay – but the peevishness in continental Europe was clear (and stood in marked contrast to higher levels of trust among respondents in both the UK and in emerging market economies).

Why? We found deep general scepticism in developed markets over the safety and privacy of digital currency. The similar and remarkably high levels of distrust across the three euro area economies surveyed suggest that monetary policy might be a factor behind lower trust in central banks. Some economists have made the case that issuing central bank digital currency would be a way to solve the zero lower bound of interest rates. Our survey indicates that ordinary citizens in these countries would react to such steps with considerable ill-wil

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Πηγή: omfif.org