The notion of a central bank digital currency (CBDC) was unfamiliar to only 3.1% of poll respondents, according to a recent announcement from Bank of Japan (BOJ) Governor Kazuo Ueda. Of these, 20% were unfamiliar with it yet had heard of it.

In contrast, 34% of Americans reject CBDCs, and nearly half of Americans are unaware of them in the US. Based to Cato Institute data, only sixteen percent of Americans favour CBDCs.

The biggest support for CBDCs is seen in developing nations where the advantages to the economy are most obvious. For instance, a survey conducted in Nigeria revealed that 91% of participants intended to use CBDCs, and Indonesians likewise expressed substantial support for the idea.

The research reveals stark disparities in public opinion towards CBDCs, with opposition to them in nations with strong privacy and liberty values and increased support for them in those with rapidly expanding economies.

Why are people against CBDCs?

Studies conducted in the UK and other Western countries have revealed a lack of confidence in national digital currencies. Privacy issues and the possibility of economic instability are among the worries.

In fact, worries about the potential impact of digital currencies on banks exist even in Japan. BOJ Governor Ueda recently underlined how most countries want to establish CBDC holding limits and mentioned their potential to generate bank outflows.

The primary worry, though, is typically privacy. People worry that intrusive governments may spy and monitor every transaction. Sceptics have occasionally expressed worries about the possibility of transaction censorship.

Do CBDCs have any benefits?

Of course, there are advocates of CBDCs who emphasise its advantages in addition to their detractors. Advocates highlight the potential to boost economically disadvantaged regions, expedite the distribution of cash to citizens by eliminating retail banks during recessions, and restrict the uses of welfare benefits, such as limiting expenditures to necessities.

Advocates of CBDCs contend that having the capacity to see financial transactions benefits both parties. Citizens would be able to keep a closer eye on how taxes are being spent and what is happening in real time with wallets containing public monies, while governments would have an unparalleled perspective of the flow of payments.

CBDCs are also suitable for a broader range of payments than cash, something BOJ Governor Ueda also pointed out in his speech. Since they “transcend space,” meaning they are non-physical, they can be used in ways cash cannot, such as in online payments, sending payments across the country, and more.

As always, there are two sides to the CBDC story. There are benefits and drawbacks, and each country must try to find a balance that works for its citizens.

It's also important to remember that issuing CBDCs on a scalable public blockchain like BSV can address a number of privacy and payment censorship concerns. By doing this, users who are worried about bureaucratic abuse would have an extra layer of safety since only money connected to illicit transactions would be able to be blocked or seized with a legitimate court order.

Similar to this, payments on a scalable, low-cost blockchain can provide a degree of secrecy not possible with national ledgers; on the BSV blockchain, identification is firewalled. It is also feasible for citizens to keep multiple wallets with little amounts of currency and use them just once or twice because transactions are so inexpensive that they are practically free.

While utilising a scalable public blockchain can achieve many of the advantages of CBDCs while reducing many of the worries about them, it still takes careful thought and effort to make all of this work.