An overwhelming majority of Spaniards surveyed by the Bank of Spain say they are not interested in using a digital euro, a new report has found.
It comes as Banco de España, Spain’s central bank, signalled its support for introducing its customers to the possibility of the digital euro – a central bank digital currency (CBDC).
The digital currency is described by the European Central Bank as “Central Bank money in digital form, available for any electronic payments in shops, online or from person to person.”
The European Commission has argued that introducing the digital currency would strengthen the position of the euro, and would allow customers more ways to pay and improved access to payment systems. It has outlined how the payment mode would be offered for free and could be used at all times without charge.
However, commentators and campaign groups have been among those to raise security concerns regarding the currency – promoting the European Commission to repeatedly state that “this is not a Big Brother project.”
A short document released by the Spanish central bank on October 19, entitled ‘The digital euro: what it is and what it would bring us’ signalled the bank’s proactive stance on the possibility of embracing the digital currency.
In the piece, the bank said that physical cash “does not allow to exploit all the advantages offered by the growing digitalization of the economy and society.”
“The goal is clear: to be able to complement the range of payment solutions available to citizens, including cash. The digital euro would be an additional option that would ensure access to public money with all its guarantees, also in an increasingly digital environment,” the document authored by Juan Ayudo, General Director to Operatione, Markets and Payment Systems, read.
Ayudo explained that the “increasing use of electronic means of payment, such as cards or mobile payments, has led the Eurosystem to analyze the possibility of issuing a digital euro as a complement to cash” – while outlining a number of benefits associated with the digital euro.
“The digital euro would be accepted throughout the eurozone and would offer free and easy-to-use basic services,” he said.
The document referred to “multiple and complex” preparations for the Eurosystem and legislators, mentioning a proposal for a regulation adopted by the European Commission at the end of June.
It said that once approved, “this regulation will lay the foundations for a possible launch of the digital euro.”
The Bank of Spain article said that while “ECB’s agreement involves undertaking preparations to issue a digital euro if deemed necessary, the decision to issue it, however, has not yet been made.”
While the Bank of Spain looks keen to welcome the potential adoption of the digital currency, it does not appear there is an appetite for the project among the Spanish population.
The survey entitled, “Study on the habits in use of cash” was conducted by IPSOS involving two groups consisting of the general public and small business representatives, with a total sample size of 1,600 respondents. It was published by the Bank of Spain, and includes questions on the digital euro, or central bank digital currency (CBDG) – and found that just 20 per cent of the Spanish general public said they were aware of a digital euro.
When the survey was carried out in 2022, 58 per cent of respondents said they would not use the digital euro in addition to their regular payment methods. However, that figure had risen one year on – with 65 per cent of those surveyed saying they would not use it to compliment other payment methods. Meanwhile, just 20 per cent of respondents said they would use the digital euro.
Young people showed the most willingness to using the digital currency, with 36 per cent of 18 to 24 year-olds saying they would use it. This percentage dropped to 31 per cent among 25-34 year-olds, while 24 per cent of those aged 35-44 said they would be open to using the currency. The percentage gradually declined among age groups surveyed – dropping to 18 per cent among those aged 55-64, and sat at just 7 per cent for those aged 65 and over.
Meanwhile, the European Central Bank (ECB) has launched an information page aimed at sharing the currency’s potential benefits, stating that it would provide an “easier life” for the public and a “stronger Europe.”
However, skepticism has been expressed by a number of European MEPs, including Markus Feber who said he had concern around the costs the system would Incur for shops that would have to accept it as a form of payment, and for banks.
“There shouldn’t be additional fees, but intermediaries would have to invest in a new payment infrastructure of the central bank that competes with the private sector,” the centre right German MEP said.
Earlier this year, the Privacy First Foundation published a list of questions and concerns regarding the digital euro. Specifically on privacy, the campaign group argued: “The proposal devotes fine words to privacy, but in any case it is impossible that privacy is going to be guaranteed ‘in a way as it exists when using cash’; anonymity does not exist when using the digital euro.”
It also said it had concerns that “the ECB is in a position to find out the identity of users. Furthermore, the ECB has several tasks under which it already has a lot of information, which can easily be combined with the data that will be processed under the proposal. As a result, it will not be difficult if required tracking users of the digital euro for ECB/DNB.”
It added that the digital euro and the identity of the user can “always be traced and the possibilities to do so are numerous; this is incomparable to cash.”
Addressing concerns regarding a digital euro, European Central Bank’s (ECB) president Christine Lagarde, said that the digital euro would not be a replacement for cash.
Speaking in September, Lagarde referred to “conspiracy theories” around the currency, stating:
“We can address all the conspiracy theories that bounce about this as if ‘Big Brother’ is suddenly going to determine what you buy, when you buy it and how restricted it should be – then I think it would be characterized as a success.”
She made the comments while responding to German centrist politician Nicola Beer, who pressed Lagarde on how the ECB would check major privacy concerns regarding transaction and holding limits, and identification, with the consequence being the total traceability of users.