Bank of Israel Claims 'Public Support' for Its CBDC Project

Although it still hasn’t made a final decision on the launch of the “digital shekel,” the Central Bank of Israel reported that public feedback on the project has been mostly positive.

On May 9, the Bank of Israel summarized the results of a public consultation on its plans for a central bank digital currency (CBDC), Reuters reported. A total of 33 responses were received from different industries, half of which were from abroad and 17 from domestic fintech circles. The statement noted that no final decision on the project's fate has yet been made, but said:

"All responses to the public consultation indicated support for continued research on the various implications for payments markets, financial and currency stability, legal and technical issues, etc."

According to reports, privacy issues have once again become controversial, despite public belief that the digital shekel will encourage competition in the payments market. The bank mentioned that some commentators prefer the currency of the future to be completely anonymous, while others insist that the fight against money laundering and black markets makes anonymity impractical. Bank of Israel aims to continue research and "engage in a fruitful dialogue with all relevant parties at all stages of R&D."

Elad Mor, head of Israel-based international blockchain PR firm MarketAcross, spoke about the attitude of the domestic crypto community towards the digital shekel:

“It feels like most digital shekel CBDC proponents are painting the topic as a broad adoption narrative. In other words, adoption of any cryptocurrency is still adoption, even if it doesn’t adhere to the core values of cryptocurrency such as decentralization globalization and anti-institutionalism.”

Mor noted that not everyone in Israel’s digital finance scene shares the same vision, but he himself believes that “bringing cryptocurrencies to the masses has to start with some level of institutional and government involvement.”

The CBDC project was first considered by the central bank in late 2017. A year later, the research team recommended stopping the project in the near future, but in May 2021, the Bank of Israel revived the idea. In November 2021, it said it would expedite research. In March 2022, the Bank of Israel confirmed that it saw no threat of "erosion" of the national banking system from the potential rollout of the digital shekel.