The public response to Israel’s “digital shekel” experiment has been mostly positive, according to the central bank, Bank of Israel.
The Bank of Israel’s public consultation on its central bank digital currency (CBDC) ideas was summarised. It received 33 answers from various sectors, half of which came from outside the country, and 17 from the domestic fintech community.
The Bank of Israel stated
“All of the responses to the public consultation show that people want to know more about the different repercussions on the payments system, financial and monetary stability, legal and technological challenges, and more.”
While the public is said to believe that the digital shekel will promote competition in the payments business, the privacy issue has resurfaced as a point of contention. Some critics want the future currency to be completely anonymous, while others argue that anonymity is unrealistic in the fight against money laundering and the illicit market. The Bank of Israel intends to keep doing research and maintain a “fruitful engagement with all relevant parties at all levels of research and development.”
The central bank first considered the CBDC initiative at the end of 2017. The research team advised that the initiative be put on hold for the time being, but the Bank of Israel reintroduced the proposal in May 2021. It announced in November 2021 that it would speed up research. The Bank of Israel affirmed in March 2022 that the eventual deployment of the digital shekel would not pose a threat to the national banking system.
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