CBDCs & Barriers to Adoption

An article on the adoption of contactless payment cards raises concerns for me over the widespread adoption of CBDCs via mobile platforms.

In a study, focusing on the US, Tom Akana and Wei Ke sought to understand the relative failure of contactless payments to take off despite being introduced twice over the course of 15 years. While issuers think this is a great idea, most US consumers don’t see a point to them for a number of reasons: consumers aren’t aware of the technology, they don’t know who will accept such payments, cash users don’t see any advantage to contactless, consumers don’t want to change their comfortable habits, and consumers are unsure of the security of contactless.

In sum: “To many consumers, this [contactless] may represent simply another process change without clear benefits to the process they recently became used to using [dipping instead of swiping a card].”

Imagine how consumers would react to being told they cannot use cash anymore, but must use a new phone app or a card e-purse. If you can’t get the average consumer to use a contactless credit card, how are you going to convince them to use a new interactive app or smart card?

This is one of the arguments for cryptobanknotes for the deployment of CBDCs. It is a familiar banknote platform that can interact with a CBDC network—if the consumer wants to. With a cryptobanknote, consumers can use it like regular cash and ignore its electronic features forever, if they like. A cryptobanknote allows for easy adoption as well as offline use.