The crypto industry is growing rapidly. Governments and central banks that do not want to be left behind are now developing regulated Central Bank Digital Currencies (CBDCs) to compete with the other decentralized cryptocurrencies like bitcoin. In the case of the US, the Federal Reserve floated the idea of a digital dollar which many Americans oppose; despite existing concerns about the current financial system.
New research conducted by Genesis Mining indicates that most Americans are against the introduction of the Digital Dollar. This study discovered that out of the 400 participants, below 25% agreed to the proposition that the government should shun paper money in favor of the digital dollar. Over 50% of the participants opposed that idea.
Nevertheless, the total number of CBDC proponents has almost doubled in a year; with just 13% of the respondents favoring a digital dollar when asked in 2019. While over 85% of the respondents said that they are familiar with the crypto assets, most of them associate virtual currencies with criminal activity. That could be the reason why there might be poor popular support for CBDC in the US.
This survey was published in the same week that Cleveland Federal Reserve President Loretta Mester announced that the Fed has been undertaking intensive research into the risks and benefits associated with CBDC during the COVID-19 pandemic.
The study also revealed that there is poor monetary literacy among the general public. Up to 38% of respondents thought the US dollar is backed by bonds, gold, or oil based on the report. Another 13% simply do not know anything. Although there was minimal interest in the monetary policy; inflation was identified as a crucial issue by up to 88% of the participants.
The Bank of Canada published a study last month which found financial literacy is majorly associated with the awareness of cryptos. However, it is negatively associated with ownership. The report discovered that the highly financially literate people were half as likely to buy cryptos than the general public.