A majority of people across the world think big tech companies cannot be trusted to issue digital money, according to a global survey that deals a further blow to Facebook’s embattled Libra project.
The poll, conducted in 13 countries for the Official Monetary and Financial Institutions Forum, revealed “strikingly low” levels of trust in tech companies in all advanced economies, the think-tank said. Although people in emerging economies were less hostile, a global majority said they would not be confident in digital money issued by the biggest search engines and social media companies, with scepticism highest in Germany, France and the UK.
A digital currency issued by central banks would be most likely to command public confidence, a view favoured ahead of all the private sector alternatives with the support of 51 per cent of respondents.
The findings could boost international efforts to create a public sector alternative to private initiatives such as Facebook’s Libra coin.
After Facebook announced its plans for a digital currency last summer, policymakers were galvanised to take action to head off what they view as a threat to central banks’ monetary sovereignty.
“The advent of Libra has completely changed what was a theoretical backroom game into something more urgent . . . The debate has been propelled from the guys with green biros in the back office right up into the board room,” said Philip Middleton, the OMFIF’s deputy chairman.
However, the survey revealed big differences in attitudes between countries and by age and income, underlining the scale of the challenge for central banks to win widespread support for experiments with digital money.
People in emerging markets are both more open to using digital money and more agnostic about who issues it, with Indians the most bullish both about the idea of a central bank digital currency (CBDC) and about the possibility of tech companies taking the lead.
Among developed economies, people were much more likely to trust a CBDC in Japan, the UK and Canada than in France, Germany or Italy — reflecting varying levels of trust in the central bank itself.
The US was the country where people had least faith in the idea of a CBDC and the strongest preference for using cash, reflecting a relatively low level of trust in the Federal Reserve.
But Mr Middleton said the survey underlined the need for all central banks “to invest far more in communication to the public as a whole”, to overcome a widespread antipathy to digital money.
“In a number of western countries, there is a feeling that we don’t like this, because it fundamentally destroys my savings or restrains my personal liberty,” he said.
Across all countries, low income and low education households were less likely to trust any financial institution — whether central banks, commercial lenders or other forms of payment service providers. The same groups were also less likely to trust digital money, as were older people.
Source: Economy - ft.com
