Investment professionals in both China and India are largely bullish on Central Bank Digital Currency (CBDC), according to a new survey from the CFA Institute.
The association, which provides credentialing for chartered financial analysts, found that 66% of its members in India and 70% in China supported the technology – vastly more than their United States-based counterparts at merely 31%.
The divergence reflects a general difference of opinion between professionals in developed and emerging markets at large, who expressed an average of 37% vs 61% support, respectively.
In an executive summary of the report, the CFA found mixed views and a limited understanding of CBDCs overall. It stated:
“A global plurality of 42% of respondents believe that central banks should launch CBDCs, while 34% disagreed and nearly one in four (24%) expressed no opinion. Only 13% said they had a strong understanding of CBDCs.”
CBDCs are a type of digital currency issued by a central bank, rather than by private companies (ex. Tether w/USDT) or anonymous individuals (ex. Satoshi Nakamoto and Bitcoin).
So far, just eleven countries have fully launched a CBDC, including Nigeria and a handful of Caribbean island nations. However, another 21 countries are currently in their CBDC pilot phase, including India, China, and most recently Russia.
Over 70 other countries are either researching or actively developing a CBDC, including the United States, Canada, and vast swaths of Europe. Political voices against such in ample supply in such regions, including the likes of Canada’s conservative leader Pierre Poilievre, Florida Governor Ron DeSantis, and others.
Why Do We Need CBDCs?
Such critics frequently deride CBDCs as a surveillance tool, and this was reflected in the survey: 50% of critics cited privacy as their top concern with CBDCs, with another 40% claiming they lacked a use case. The last 10% felt they may be harmful to banks.
On the other hand, 58% of supporters said that the biggest benefit CBDCs could provide would be faster payments. Another 30% suggested that central banks ought to play a role in the development of digital currencies in the first place.
“While a large majority agrees that public trust in fiat money is suffering because of monetary policy, a solid majority also believes that private money will always be inferior to government money,” the report added.
The survey also showed that commercial and investment banks showed ~50% support for CBDCs, while asset managers were only 38% in favor.