A recent survey by Ipsos MORI, analysed by Official Monetary and Financial Institutions Forum (OMFIF) a forum for central banking, economic policy and public investment, asserts that central banks are more trustworthy issuers of currency than tech firms.
Central banks score the highest net trust rating (more than 13 percentage points), whereas major tech companies have a net trust rating of almost negative 10 percentage points. The survey was conducted in 13 countries through an internet-based questionnaire for the most efficient reach in all countries.
However, the study—in which respondents from 13 countries participated— makes a notable distinction. According to findings of the study, it is central banks from developed states—where there are strong institutions as well as the right checks and balances—that score better than tech companies yet the story is quite different in developing countries.
Tech companies and other commercially oriented players stand a better chance of seeing their digital currencies being accepted elsewhere.

The caveat
There are many reasons why this is the case. To begin with, strong institutions (which ensure public entities like central banks adhere to their mandate) are quite rare in much of the developing world.
This means management of an entity such as a central bank, can sometimes act contrary to their mandate without getting penalized. There is no deterrent for bad behavior apparently.
The established ground rules of issuing or printing of currency and its management are often violated in the name of national security or for the sake of the economy. Yet when a central bank overprints, it results in the dilution of value (inflation) which affects everyone.
When that happens, (and it happens a lot in the developing world) people lose confidence in the currency issuer. For years, a majority fiat currency users in such situations lacked alternatives or the means to voice to their displeasure.
Often only a few, usually the wealthy, are able to shield themselves by investing in commodities like gold (which needs a license in some jurisdictions) or old paintings. However, in today’s digital age, ordinary people too, can now also protect their meager savings in times of uncertainty by converting their funds into decentralized cryptocurrencies.
The popularity of some digital currencies such as Bitcoin could be down to the waning confidence in central banks issued fiat money. At least that is the case in the developing world, people seem to prefer these alternatives because they are not centrally issued or controlled.

So there is a caveat to OMFIF’s conclusions. The Ipos MORI findings seemingly apply to developed countries.
Citizens countries from like Nigeria, which has a sizeable number of its people (both at home and abroad) using privately issued digital currencies or those from hyperinflation hit Zimbabwe, may not share the same viewpoint as their counterparts from developed lands.
Citizens from the two countries are not included or mentioned in the study yet their views might have an important impact on the study’s general conclusion.
For the Zimbabweans, trust in a central bank tanked almost a decade ago when the economy was brought down by what the media called quasi-fiscal activities carried out by this institution. The so-called quasi-fiscal activities were partly responsible for the record hyperinflation, the second highest ever recorded.
Hyperinflation accelerates value erosion and some Zimbabweans blame the Reserve Bank of Zimbabwe (RBZ) for this value loss.
Since Zimbabwe is not included in Ipos MORI study, the well known sentiments by Zimbabweans towards their central bank can only count as anecdotal evidence at best.
Yet, in late 2016, the RBZ itself could have unwittingly admitted that it lacked the confidence of Zimbabweans when it went out of its way to assure them that it would not repeat previous acts (quasi-fiscal activities) that ultimately led to the collapse of the Zimdollar between 2008/9.
Prior to the reintroduction of a local currency, then dubbed the bond note or dollar, RBZ ran a sustained public relations campaign in the local media just to mollify skeptical Zimbabweans.
RBZ’s message was that there would be no repeat of currency overprinting and that this time, all currency issued would be backed by a $200 million fund set up by a regional financial institution. In other words, RBZ knew it had a deficiency of trust and it had to work hard to regain this.
Unfortunately for the RBZ, all this effort did not assuage skeptical Zimbabweans and some of them responded by staging violent protest against plans to reintroduce local currency. Such was the extent of the mistrust.
Developing countries need alternatives
Of course, Zimbabwe might be an extreme case but it is also fair to conclude that sentiments by Zimbabweans against their central bank are shared by many others in developing countries. In much of the developing world, central banks are often used to fund unbudgeted expenditures by governments with an insatiable appetite for expensive things but who cannot raise enough from taxes to afford these.
A country’s currency is often the first casualty of this uncontrolled money printing and it stands to reason that citizens will seek alternatives.
Meanwhile, the same study makes a notable observation, one which appears to undercut OMFIF’s bold claims. According to the study;
‘In all countries in the sample, educational, income and geographical differences have a significant impact on trust. Those individuals with higher levels of education or income, or who live in urban regions, are more likely to trust all types of payments institutions.’
So again the apparent trust in central bank issued fiat or digital currency could be an indication of the general ignorance of alternatives by users. As general knowledge of cryptocurrencies, particularly decentralized ones, improves, more and more fiat currency users will make the switch.
That is not happening fast enough because privately issued cryptocurrencies still face a myriad of problems that prevent them from scaling. Proposed tokens like Facebook’s Libra or Telegram’s TRON face political and legal hurdles respectively and this is stalling efforts to make tokens issued by tech companies more widely accepted.

When these challenges are eventually overcome, a similar study will undoubtedly produce different results.