The Bank for International Settlements published a working paper assessing how consumers in Korea might respond to a retail central bank digital currency (CBDC) as a payment method, using a discrete choice experiment to predict demand under alternative design scenarios. In simulations, a benchmark CBDC design is selected as the most preferred payment method by 19% of respondents, with the estimated share rising to 27% under designs with stronger incentives. The experiment involved more than 3,500 participants who chose between pairs of hypothetical payment methods that varied by attributes including issuer, issuance form, fees, settlement timing and discounts. Financial incentives (fees and discounts) were the strongest drivers of payment choice, while issuer and form of issuance also mattered materially. Preferences were higher when payment methods were provided as cards or smartphone apps rather than banknotes; older respondents showed greater trust in central bank-issued instruments, while younger respondents showed stronger preferences for big tech and app-based options. The authors report that predicted usage shares for existing payment methods closely match observed patterns in Korea, supporting the credibility of the approach for policy discussion.
Bank for International Settlements 2025-10-08
Bank for International Settlements research uses a Korean discrete choice experiment to estimate retail CBDC adoption at 19–27% and highlights the role of incentives
The Bank for International Settlements released a working paper analyzing consumer responses in Korea to a retail central bank digital currency (CBDC) using a discrete choice experiment. The study found that 19% of respondents preferred a benchmark CBDC design, with preference increasing to 27% with stronger incentives. Financial incentives were key drivers of choice, and preferences varied by age and payment method format.