A recent survey conducted on crypto assets and investment by Crypto.com and The Economist saw participation from over 3,000 users.
The survey shed some interesting light on how the general public perceives cryptocurrencies. The most surprising part was that the majority of those surveyed expressed far more interest and confidence in Central Bank Issued Digital Currencies than more popular decentralized crypto assets.
The survey revealed:
- 38% of the people did not consider decentralized crypto as a safe investment against
- 26% of people who believed that decentralized crypto tokens are a safe form of investments while
- 25% of those surveyed were in the middle and the remaining
- 11% had no idea whether they are safe or not.
On the other hand, 54% of the surveyed people showed trust in CBDC and believed that a token issued by their government or central bank would be a more secure form of investment, while 14% believed CBDCs are not that safe. 23% of the correspondent was in-between and the remaining 9% had no idea.
Why People Trust CBDCs More than Decentralized Currency?
The cryptocurrency space emerged with the launch of Bitcoin after the financial crisis of 2008/9. It only gained the attention of the large public after the massive rise in 2017.
At the same time, Bitcoin and cryptocurrencies received a lot of negative press, perpetuated by central banks, commercial banks and even governments who called it a mere internet bubble.
However, in the following years, these critics realized that cryptocurrencies, like any other new asset, are volatile and not just an internet bubble and thus a lot of them changed their stance including governments.
These cryptocurrencies have been advertised as an alternative form of currency by many proponents. But because of their high volatility (which has come down significantly) it still cannot be used as a direct form of exchange.
Thus a majority of the people use it as an instrument for investment diversification. Along with the volatility issues, and passive regulatory stances of governments, even in developed nations, it makes it tough for the common public to look at it as a safe bet.
The lack of knowledge among the broader public, whose only aim is to see Bitcoin rise to 2017 level highs as a quick profit maker, in addition to evolving scams involving crypto, wreaks havoc on the underlying trust in digital asset classes.
Apart from that CBDCs are basically digitized fiat that runs on the common credit system of the country and thus people won’t have to worry about high volatility or their investment getting to zero.
Apart from that, a majority of the countries are looking to launch their own CBDCs. China currently at the top, having already started trials for its national digitized yuan. Other countries, meanwhile, have either started research for the same or are looking to study the pros and cons of launching CBDCs.
The Rate of Crypto Adoption in Developed Nations Are High
The survey found that there is a 20% deviation in the rate of adoption between developed and developing nations. Meaning that the chances of consumers in developed nations of adopting crypto was 20% higher than developing nations.
The survey revealed that 23% of the surveyed consumers in developed nations owned cryptocurrencies, while only 19% of people in developing nations had already invested in digital assets.
The study also revealed that 60% of crypto owners were aged between 18 and 38 years old while only 40% above 39 years owned crypto.