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A new report from De NederlandscheBank (DNB) shows that Dutch consumers are open to using the digital euro, in a boost for both advocates of central bank digital currencies (CBDCs) and those concerned about Europe’s payment sovereignty.
The report, built on a survey of 2,000 consumers conducted on the central bank’s behalf by market research agency Flycatcher, notes that more than two-thirds of respondents were willing to use the digital currency.
Frank van der Horst, researcher at the DNB, explained that participants were allocated a budget of €800 or €3,000 per month, roughly corresponding to the monthly budgets of people in low and middle income brackets.
He said: “Those two amounts roughly correspond to what people in lower and middle-income brackets have to spend on a monthly basis on average, and we also wanted to know whether income differences have an effect on the use of the digital euro.”
Participants were asked to split their budget over three types of payment, leaving it in their bank account and spending it with a debit card, or splitting the amount between digital euro and cash.
According to van der Horst: “During the month, half of those surveyed were given 50% certainty they could use their debit card for their in-store purchases, such as groceries. The other half were given 99% certainty that they could use their debit card. We wanted to investigate whether the use of the digital euro would differ as a result.”
A reluctant minority
Around a third of the participants were reluctant to use the digital euro, the DNB said.
Around half of non-users said they had insufficient knowledge about the means of payment, while others said they did not trust it.
Overall, however, the survey found that the willingness of the participants to carry the digital euro was high.
In addition, it found that Dutch consumers had no problem with a holding limit of €3,000 in digital euro per person.
This is the maximum amount an individual can hold, and is intended to prevent people from excessive withdrawals that threaten their financial stability.
DNB researcher Anneloes van Gent noted that, during the study, as the uncertainty about whether or not they could use debit cards grew, people chose to keep not only more cash but also more digital euro in their pockets.
She said: "They treated the digital euro like cash.”
The survey found that 42 percent of participants preferred to keep their digital euros on a debit card, 33 percent preferred an app and 26 percent had no preference.
The research also covered the offline digital euro, which works without an internet connection.
Van Gent said the offline currency had important privacy advantages for users: “This is where we see the real added value for the Netherlands. You can access it any time, just like a picture you take and store on your phone, rather than in the cloud. And because it is stored locally, no third party is involved in a payment. Only you and the recipient know about the transaction, so it is as private as cash.”
The value of the offline CBDC to consumers follows the Bank of England’s finding that it is technically feasible for its digital pound to be used offline.
Along with the overall results of the survey, this may help to persuade those still unconvinced of the value of the digital euro that it does have a meaningful use case.
Ensuring payments sovereignty
Digital currency has become a subject of growing importance in the EU, with the European Central Bank (ECB) having sought for some time now to persuade sceptical lawmakers of the advantages of a digital currency.
More recently, the question of European payments sovereignty has come to the fore.
Its advocates argue that the region is over-reliant on the major US card networks, particularly Visa and Mastercard.
Although this has been a topic of discussion for a while now, concerns are only rising as the US becomes an increasingly unreliable partner under the Trump administration and relations with Russia and China remain less than amicable.
Given the lack of a Europe-wide local card network, the digital euro could present an alternative way to ensure payment sovereignty in an increasingly turbulent world.
