A survey carried out by the central bank of Israel shows a very positive response from stakeholders about the possible issuance of a digital shekel. The participants supported the development of the project.
Bank of Israel Unveils Results from Its Survey on Digital Shekel Project
The Israel Monetary Authority has published a paper showing the results of public participation that were aimed at gathering info from interested parties concerning the central bank digital currency (CBDC) project. The regulator indicated that it got 33 responses, 50% of them from abroad, while the rest came from the local fintech community.
According to the report, most respondents are very supportive of the idea of issuing digital shekel, highlighting advantages such as offering competition in the evolving payment market. They also indicated that a digital shekel could help to promote innovation in the country’s payment system, which currently features high entry barriers.
Participants Call for Additional Digital Currency Use Cases
Most participants held the view that growing digital inclusion should be the prime motivation for the issuance of CBDC. The Digital Shekel Steering Committee takes this as an added advantage of the CBDC. Other participants indicated that cutting down the costs in the current financial system should be a priority for the new CBDC.
Notably, the idea of privacy split the survey respondents almost in the middle, with one faction calling for the adoption of cash-like features with total anonymity while others supported only a significant portion of confidentiality while adhering to anti-money laundering regulations.
Other suggestions from the participants included a call for increasing the list of use-cases. They indicated that the digital shekel should allow for transfers of government payments, including via tokens made for specific purposes. Healthcare and food supply are two areas where participants indicated they could use CBDC for dedicated transfers.
The Bank of Israel had already announced plans for a digital currency way back in 2017 before suspending the project. The work on the project resumed in 2021 when the central bank unveiled a model of digital currency. Although it said that the digital shekel does not appear to be a threat to the national financial system, it is yet to make the final decision.