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Digital euro demand: design, individuals’ payment preferences and socioeconomic factors

Author

Listed:
  • Lambert, Claudia
  • Larkou, Chloe
  • Pancaro, Cosimo
  • Pellicani, Antonella
  • Sintonen, Meri
Abstract
By applying a structural demand model to unique consumer-level survey data from the euro area, we assess how different CBDC design options, combined with individual (revealed) preferences, influence the potential demand for a digital euro. Estimating the demand for a digital euro, we find that if it were unconstrained, it could range, in steady state, between 3-28% of household liquid assets or €0.12 - €1.11 trillion, depending on whether consumers would perceive the digital euro to be more cash-like or deposit-like. With an illustrative €3,000 holding limit per person, it could instead range between 2-9% or €0.10 -€0.38 trillion. Privacy, automatic funding, and instant settlement raise its potential demand. JEL Classification: E41, E50, E58

Suggested Citation

  • Lambert, Claudia & Larkou, Chloe & Pancaro, Cosimo & Pellicani, Antonella & Sintonen, Meri, 2024. "Digital euro demand: design, individuals’ payment preferences and socioeconomic factors," Working Paper Series 2980, European Central Bank.
    • Handle: RePEc:ecb:ecbwps:20242980
    Note: 1559770
    as

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    File URL: https://www.ecb.europa.eu//pub/pdf/scpwps/ecb.wp2980~5f64961c8f.en.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Central bank digital currency; demand estimation; design attributes; structural model;
    All these keywords.

    JEL classification:

    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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