Ozturkcan, S., "Conceptualizing Consumer Paradoxes towards the Central Bank Digital Currency (CBDC) in the context of COVID-19," AIRSI2021 Conference: Technologies 4.0 in Tourism, Services & Marketing, July 12-14, 2021, University of Zaragoza, Spain.

1. Conceptualizing Consumer Paradoxes
towards the Central Bank Digital
Currency (CBDC) in the context of
COVID-19
Assoc.Prof. Selcen Öztürkcan
Selcen.Ozturkcan@lnu.se
Linnaeus University
Sweden
https://orcid.org/0000-0003-2248-0802
Cite as:
Ozturkcan, S., "Conceptualizing Consumer Paradoxes towards the Central Bank Digital Currency (CBDC) in the context of COVID-19," AIRSI2021 Conference: Technologies 4.0 in Tourism, Services &
Marketing, July 12-14, 2021, University of Zaragoza, Spain.

2. •introduction
•cbdc
•innovation-decision process
•technology readiness
•central paradoxes of technological products
•remarks, propositions and conclusion
agenda

3. background: pre-pandemic
Cashless society was already on
the rise pre-pandemic in some
countries.

4. background: intra-pandemic
Intra-pandemic, some concerns on
banknotes and coins' safety in
transmitting viruses, bacteria, and
microbes (AP, 2020; Greenberg, 2020).
SARS-CoV-2, the virus responsible for COVID-19, can
survive for up to four weeks on banknotes (Riddell,
Goldie, Hill, Eagles, & Drew, 2020).

5. background: intra-pandemic
An emerging preference to refrain from handling cash
but using alternative payment solutions arose (Nixon, 2020;
Roberts, 2020; Stieg, 2020), which also helped in coming to
peace with any remaining skepticism towards such
means (Auer, Cornelli, & Frost, 2020a; Rapyd, 2020).
CBDCs may offer an attractive alternative approach
to cash with their resilient and accessible central
bank-operated infrastructures in facilitating
contact-free payment options.

6. cbdc (central bank digital currency)
● a digital currency, also known as "digital base money" or "digital fiat currency" (Ozturkcan et
al., 2019)
● a global race among central banks to launch theirs
○ > 80% of central banks engage in CBDC development (Boar, Holden, & Wadsworth, 2020, p. 126)
● liabilities of issuing central banks (Fernández-Villaverde, Sanches, Schilling, & Uhlig, 2020)
● legal tender status: entitle a debtor to discharge monetary obligations by tendering
currency to the creditor (Proctor, 2012)
● efficiency and convenience similar to the banknotes or coins in a wallet but in a digital
format
● additional unique advantages in comparison to the physical money deposited in a bank
account (Bindseil, 2019; European Central, 2019) - especially during financial crisis

7. cbdc (central bank digital currency)
● Banks are liable for any deposits of physical money
● under normal conditions, most banks realize their
liabilities without any issues but always in times of
financial distress
● CBDC does not need any deposit insurance cap
● Emerging literature on CBDCs (Bindseil, 2019; Fernández-Villaverde
et al., 2020) focusing on the banking services, retail banks,
CBDC, and central banks
● what about prospective customers’ predispositions??

8. innovation-decision process
The Innovation-Decision Process (Rogers, 1983, p. 165)

9. technology-readiness
● Most consumers became tech-savvy (Lin & Hsieh, 2006; Meuter, Ostrom, Roundtree, & Bitner, 2000)
● Yet, not always choose to adopt innovations; some still have a high preference
for avoidance towards particular innovations (Meuter, Ostrom, Bitner, & Roundtree, 2003)
● Willingness of consumers may play a key role in understanding their
predispositions towards a given innovation (Ho & Ko, 2008; Parasuraman, 2000)
● Parasuraman (2000, p. 308) defines technology-readiness as the "people's propensity
to embrace and use new technologies for accomplishing goals in home life and at
work."

10. drivers and inhibitors of technology-readiness
Paradox Description
Control/chaos Technology can facilitate regulation or order, and technology can lead to upheaval
or disorder
Freedom/enslavement Technology can facilitate independence or fewer restrictions, and technology can
lead to dependence or more restrictions
New/obsolete New technologies provide the user with the most recently developed benefits of
scientific knowledge, and new technologies are already or soon to be outmoded
as they reach the marketplace
Competence/incompetence Technology can facilitate feelings of intelligence or efficacy, and technology can
lead to feelings of ignorance or ineptitude
Efficiency/inefficiency Technology can facilitate less effort or time spent in certain activities, and
technology can lead to more effort or time in certain activities
Fulfills/creates needs Technology can facilitate the fulfillment of needs or desires, and technology can
lead to the development or awareness of needs or desires previously unrealized
Assimilation/isolation Technology can facilitate human togetherness, and technology can lead to human
separation
Engaging/disengaging Technology can facilitate involvement, flow, or activity, and technology can lead to
disconnection, disruption, or passivity
Eight Central
Paradoxes of
Technological
Products
(Mick & Fournier, 1998, p.
126)

11. • Proposition 1a (control): CBDCs may facilitate regulation or order in the lives of the consumers.
• Proposition 1b (chaos): CBDCs may lead to upheaval or disorder in the lives of the consumers.
• Proposition 2a (freedom): CBDCs may facilitate independence or fewer restrictions in the lives of the consumers.
• Proposition 2b (enslavement): CBDCs may lead to dependence or more restrictions in the lives of the consumers.
• Proposition 3a (new): CBDCs may provide the consumers with the most recently developed benefits of scientific knowledge.
• Proposition 3b (obsolete): CBDCs may soon be outmoded by other substitutes as they reach the consumers.
• Proposition 4a (competence): CBDCs may facilitate feelings of intelligence or efficacy.
• Proposition 4b (incompetence): CBDCs may lead to feelings of ignorance or ineptitude.
• Proposition 5a (efficiency): CBDCs may facilitate less effort or time spent in certain activities in the lives of consumers.
• Proposition 5b (inefficiency): CBDCs may lead to more effort or time in certain activities in the lives of consumers.
• Proposition 6a (fulfills needs): CBDCs may facilitate the fulfillment of needs or desires by the consumers.
• Proposition 6a (creates needs): CBDCs may lead to the development or awareness of needs or desires previously unrealized by the
consumers.
• Proposition 7a (assimilation): CBDCs may facilitate human togetherness.
• Proposition 7a (isolation): CBDCs may lead to human separation.
• Proposition 8a (engaging): CBDCs may facilitate involvement, flow, or activity in the lives of consumers.
• Proposition 8a (disengaging): CBDCs may lead to disconnection, disruption, or passivity in the lives of consumers.
propositions

12. • lack of actual usage --> overview of some possible consumer paradoxes (Mick &
Fournier, 1998) towards the CBDCs can help build research efforts
• existing literature on technology paradoxes and consumer readiness focuses
on technological goods and services that a consumer can buy, where frequent
references are made to brand or warranty.
• the context of CBDC goes beyond that of a typical technology product and
even that of other payment methods
• physical money and the financial system surrounding it are about to face a
paradigm shift, which is further accelerated with the emerging concerns about
handling banknotes during the COVID-19 pandemic.
• in this context that the developed overview of possible consumer paradoxes
towards the CBDCs needs to be tested across different cultures for further
investigating the suggested relevant propositions.
remarks

13. conclusion
● consumer adoption as well as
avoidance dynamics surrounding the
ongoing CBDC launch related
innovations demand further research
● under-banked and unbanked might be
at risk of a further deepening digital
divide

14. Thank you !
question and comments
Selcen.Ozturkcan@lnu.se
Linnaeus University
Sweden
https://orcid.org/0000-0003-2248-0802

15. references
• AP. (2020). Can the coronavirus survive on money? Retrieved from https://apnews.com/article/7f96f57e3c327e7dbe2be79f2bbdd543
• Auer, R., & Boehme, R. (2020). The technology of retail central bank digital currency. BIS Quarterly Review(March). Retrieved from https://www.bis.org/publ/qtrpdf/r_qt2003j.htm
• Auer, R., Cornelli, G., & Frost, J. (2020). Covid-19, cash, and the future of payments. Retrieved from https://www.bis.org/publ/bisbull03.pdf
• Bank of, C., & Schweizerische, N. (2020). Central bank digital currencies: foundational principles and core features.
• Bindseil, U. (2019). Central Bank Digital Currency: Financial System Implications and Control. International Journal of Political Economy, 48(4), 303-335. doi:10.1080/08911916.2019.1693160
• Boar, C., Holden, H., & Wadsworth, A. (2020). Impending arrival: a sequel to the survey on central banking digital currency: Bank for International Settlements.
• Bossu, W., Itatani, M., Margulis, C., Rossi, A., Weenink, H., & Yoshinaga, A. (2020). Legal Aspects of Central Bank Digital Currency: Central Bank and Monetary Law Considerations. In: IMF Working Paper.
• Citi. (2020). Central Bank Digital Currencies – How Will the Future Unfold.
• CoinDesk. (2020). Chinese State-Owned Bank Offers Test Interface for PBoC Central Bank Digital Currency. CoinDesk. Retrieved from
https://www.coindesk.com/chinese-state-owned-bank-offers-test-interface-for-pboc-central-bank-digital-currency
• European Central, B. (2019). Innovation and its impact on the European retail payment landscape. In.
• European Central, B. (2020). An ECB digital currency – a flight of fancy? Retrieved from https://www.ecb.europa.eu/press/key/date/2020/html/ecb.sp200511~01209cb324.en.html
• Fernández-Villaverde, J., Sanches, D., Schilling, L., & Uhlig, H. (2020). Central bank digital currency: Central banking for all? Review of Economic Dynamics. doi:https://doi.org/10.1016/j.red.2020.12.004
• GLOBSEC. (2020, 2020/07/03/T11:12:23+02:00). The Dynamics of Central Bank Digital Currency. Retrieved from https://www.globsec.org/2020/07/03/the-dynamics-of-central-bank-digital-currency/
• Greenberg, J. R. (2020). Will covid-19 end the use of paper money? Retrieved from https://www.washingtonpost.com/outlook/2020/05/15/will-covid-19-end-use-paper-money/
• Ho, S. H., & Ko, Y. Y. (2008). Effects of self-service technology on customer value and customer readiness: the case of internet banking. Internet Banking, 18(4), 427–446.
• Lin, J. S., & Hsieh, P. (2006). The role of technology readiness in customers' perceptions and adoption of self-service technologies. International Journal of Service Industry Management, 17(5), 497–517.
• Mady, T. T. (2011). Sentiment toward marketing: Should we care about consumer alienation and readiness to use technology? Journal of Consumer Behaviour, 10(4), 192-204. doi:https://doi.org/10.1002/cb.329
• Meuter, M. L., Ostrom, A. L., Bitner, M. J., & Roundtree, R. I. (2003). The influence of technology anxiety on consumer use and experiences with self-service technologies. Journal of Business Research, 56(11),
899-907.
• Meuter, M. L., Ostrom, A. L., Roundtree, R. I., & Bitner, M. J. (2000). Self-service technologies: understanding customer satisfaction with technology-based service encounters. Journal of Marketing, 64(3), 50-64.
• Mick, D., & Fournier, S. (1998). Paradoxes of Technology: Consumer Cognizance, Emotions, and Coping Strategies. Journal of Consumer Research, 25, 123-143. doi:10.1086/209531
• Munene, C. W., Pettigrew, S., & Mizerski, K. (2002). Paradoxes and Technology Adoption: a Retail Banking Analysis. In AP - Asia Pacific Advances in Consumer Research (Vol. 5, pp. 331-335).
• Nixon, G. (2020). Contactless safer than cash? It's 'fake news' says ATM operator as it launches a campaign amid coronavirus fears over handling coins and notes. Retrieved from
https://www.thisismoney.co.uk/money/saving/article-8369171/It-safe-use-physical-cash-despite-coronavirus-says-ATM-boss.html
• OMFIF. (2019). Retail CBDCs: The next payments frontier. Retrieved from https://www.omfif.org/ibm19/#:~:text=Policy%2Dmakers%20at%20a%20number,report%20from%20IBM%20and%20OMFIF.
• Ozturkcan, S., Kasap, N., Ozdinc, M., & Tanaltay, A. (2019). Digital National Currency: Example of Sweden and e-Krona.
• Parasuraman, A. (2000). Technology readiness index (TRI): a multiple-item scale to measure readiness to embrace new technologies. Journal of Service Research, 2(4), 307–320.
• Proctor, C. (2012). Mann on the Legal Aspect of Money: Oxford University Press.
• Rapyd. (2020). New Research: Consumers Want Contactless and Digital Payments Due to COVID-19. Retrieved from https://www.rapyd.net/blog/contactless-and-digital-payments/
• Richards, T., Thompson, C., & Dark, C. (2020). Retail Central Bank Digital Currency: Design Considerations, Rationales and Implications | Bulletin – September Quarter 2020. Retrieved from
https://www.rba.gov.au/publications/bulletin/2020/sep/retail-central-bank-digital-currency-design-considerations-rationales-and-implications.html
• Riddell, S., Goldie, S., Hill, A., Eagles, D., & Drew, T. W. (2020). The effect of temperature on persistence of SARS-CoV-2 on common surfaces. Virology Journal, 17(1), 145. doi:10.1186/s12985-020-01418-7
• Roberts, J. J. (2020). Most Americans now fear touching cash, survey says. Retrieved from https://fortune.com/2020/08/11/coronavirus-is-cash-safe-during-covid-germs-money/
• Rogers, E. M. (1983). Diffusion of Innovations. New York, NY, USA: The Free Press.
• Stieg, C. (2020). Can going cashless prevent coronavirus spread? Here's what the WHO wants you to know. Retrieved from
https://www.cnbc.com/2020/03/06/what-you-need-to-know-about-handling-cash-amid-coronavirus-spread-who.html