FALL 2023 NO.76 / THOUGHT LEADERSHIP BRIEF 2 ASSESSMENT In view of the possibility of Hong Kong to issue an rCBDC, we conducted a large-scale survey in August-September 2022 to explore public perceptions and views regarding the e-HKD, personal data privacy, design features, and willingness of adoption. We conducted the survey via a major web portal that used to be an official platform for online government services in Hong Kong and a major media group. These two survey distributors combined have a large database that reflects the demographic composition of the general population. The questionnaire consisted of 39 core questions with 33 items, in addition to demographic questions. 6,681 valid responses were received. We found that nearly 90% of the Hong Kong adult population is experienced in using digital banking, specifically on their mobile phones. However, more than 65% of the surveyed population has never heard of CBDC and close to 80% of all respondents have never held or used any virtual currencies and assets, which suggests a general lack of understanding of digital currency among the Hong Kong population. ISSUE Central banks around the world are exploring Central Bank Digital Currencies (CBDCs). Retail Central Bank Digital Currency (rCBDC), or “general purpose” CBDC, is intended for use by the public to circulate as a currency. However, as of December 2022, of the more than 100 countries that have been exploring CBDCs, only 11 countries have fully launched an rCBDC for use by the public in everyday retail use cases. The Hong Kong Monetary Authority (HKMA) first introduced its plan for a centralized digital currency in June 2021 as part of the “Fintech 2025” strategy. In view of the small number of economies that have gained hands-on experiences with rCBDC, it is important for the HKMA and other stakeholders to accurately gauge public perception of the “e-HKD” at an early stage. Although Hong Kong’s population is known for its technological readiness and has experience in conducting banking transactions using mobile phones, there is still a general lack of understanding of digital currency, which could translate into headwinds for the e-HKD roll-out. There is a risk of conundrum: if public sentiment proves lacklustre, merchants will have fewer incentives to adopt the e-HKD. Acceptance by merchants, in turn, is indicated as one of the major considerations of the public for using e-HKD for their daily transactions. Figure 1. Why Are You Likely to Use e-HKD for Daily Transactions? Figure 2. Why Are You Not Likely to Use e-HKD for Daily Transactions? Others (please specify) Believe in new technology Transactions are more secured Ease of payment tracking No need to carry cash around e-HKD will be accepted by all parties as it is a legal tender The risk of holding e-HKD is very low as it is backed by HKMA I am not satisfied with existing payment options 5.62% 32.87% 40.18% 77.07% 43.07% 33.05% 12.17% 1.40% Concerns with cybersecurity Concerns with financial loss Others (please specify) Uncertainty about the technology I am satisfied with existing payment options I don't have time to learn how to use a new payment solution Concerns with personal data privacy (e.g., leaking of my personal data / financial assets / transaction records) 60.12% 15.80% 55.19% 51.13% 36.91% 29.01% 4.57%
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