[2023 BOK-MNB Joint Research Workshop] Predicting the Payment Preference for CBDC: A Discrete Choice Experiment

Payment Preference CBDC Discrete choice experiment Central Bank Digital Currency 디지털 화폐

Predicting the Payment Preference for CBDC, A Discrete Choice Experiment
Author : Syngjoo Choi, Bongseop Kim, Young Sik Kim, Ohik Kwon, Soeun Park

This paper conduct a discrete choice experiment with a nationally representative sample of over 3,500 participants to predict the preference for Central Bank Digital Currency(CBDC) as a means of payment. We randomly vary nine monetary and nonmonetary attributes that cover the wide range of those values to include not only existing payment methods but also potential payment methods such as CBDC. We find that the preference for a payment method is highly responsive to both monetary attributes, such as discount rate, and non-monetary attributes, such as issuance form; for instance, an increase in discount rate can increase the adoption of a payment method by up to 11 percentage point and the change of issuance form from banknotes to smartphone apps has a similar effect size. Simulations based on the estimates from this experiment allow us to predict that about 21% ∼ 30% of the respondents choose CBDC as the most preferred payment method, second most popular after credit or debit cards. These results indicate that once introduced, CBDC would be more readily used than cash or mobile fast payment. Further, the preference for CBDC is highly responsive to its own and alternatives’ discount rates, implying that financial rewards for CBDC and existing payment methods are likely to play an important role in the adoption of CBDC.

Keywords: Payment Preference, CBDC, Discrete choice experiment

JEL classification numbers: E40, E50, C90

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