Bank of Israel claims 'public support' for its CBDC project

Published at: May 11, 2022

Despite the fact that it still hasn't made a final decision on the launch of the “digital shekel,” Israel’s central bank reported that the public feedback on the project is mainly positive.

According to Reuters, on Monday, The Bank of Israel summarized the results of the public consultation on its central bank digital currency (CBDC) plans. It has received 33 responses from different sectors, with half of them coming from abroad and 17 from the domestic fintech community. While specifying that the final decision on the project’s fate is yet to be made, it claimed:

“All of the responses to the public consultation indicate support for continued research regarding the various implications on the payments market, financial and monetary stability, legal and technological issues, and more.”

While the public reportedly believes that the digital shekel would encourage competition in the payments market, it is the privacy issue that once again emerged as controversial. The bank mentions that some commentators prefer the future currency to be fully anonymous while others insist that the fight against money laundering and the black market renders anonymity impractical. The Bank of Israel aims to continue the research and a “fruitful dialogue with all interested parties at all stages of research and development.”

Related: US Congress eyes e-cash as an alternative to CBDC

Speaking to Cointelegraph about the attitudes toward the digital shekel among the domestic crypto community, Elad Mor, head of international blockchain PR firm MarketAcross, which is headquartered in Israel, said:

"It feels like most digital shekel CBDC supporters are painting the topic as a broad-strokes adoption narrative. In other words, any crypto adoption is still adoption even if it doesn’t adhere to crypto’s core values like decentralization and anti-institutionalism."

Mor noted that not everyone in Israel's digital finance sector shared the same vision. Yet he, himself, believes that "bringing crypto to the masses has to start with institutional and governmental involvement to some extent."

The CBDC project was first considered by the central bank at the end of 2017. A year later, the research team recommended halting the project for the near future, but in May 2021, the Bank of Israel revived the idea. In November 2021, it said it would accelerate the research. In March 2022, the Bank of Israel confirmed that it didn’t see a threat of “erosion” to the national banking system coming from the potential launch of the digital shekel.

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