The Bank of Israel released a study on public interest in digital shekel adoption. More than half of the respondents (51.57%) showed a high level of interest in using the digital shekel. 34% percent of the public expressed a very high level of interest, and 17% expressed medium-high interest. This finding indicates a high potential for adopt the digital shekel by the Israeli public.
As part of the Bank of Israel’s digital shekel project, a business and functional design process of the digital shekel system is being conducted. This is part of the action plan for the potential issuance of a digital shekel.
The study examined what features of the digital shekel may increase its use. The clear advantages of the digital shekel as noted by the sample participants in open-ended questions were all related to ease of use. Other prominent features include customer protection against fraud and system errors, the Bank of Israel’s backing of the currency, and the innovation embedded in it.
In contrast, the main concerns raised by the survey participants were cybersecurity and information security risks, difficulty of use, and lack of accessibility for certain population groups. Unlike findings in some other countries, privacy concerns did not emerge as a dominant issue.
Participants were then presented with a series of potential features of a digital shekel, some of which do not exist with current payment methods and were not mentioned by respondents in the open-ended questions.
The two features identified as most important to respondents were protection against fraud and errors (49.5%) and receiving an interest rate of 3.5% (48.8%). Another interesting finding is that confidentiality with respect to the Bank of Israel was not among the most important features of a digital shekel (“Even though the money is issued and managed by the Bank of Israel, it will not have the ability to know how much money you hold or where you spend it”) — only 22.8% of respondents considered this feature important.
The respondents also showed interest in innovative features that were not available in payment methods in Israel at the time of the survey and were not mentioned at the initiative of the respondents at the beginning of the survey, such as offline use without an internet connection (33%) and smart payments (28%).
Most of the study’s findings are similar to those of studies conducted by other central banks. However, two major differences were found. The first has to do with the issue of privacy. In Israel, the issue was found to privacy emerged as a major concern. The second difference has to do with the demographic characteristic of age. In Israel, the findings indicate a greater willingness to adopt a digital shekel as age increases, particularly over the age of 40. In contrast, some of the studies by other central banks show that it is the younger population that is most ready to adopt a digital currency.
The design process is based on an analysis of the required functionalities to support the motivations defined for issuing a digital shekel, as well as insights gained from various stakeholders, including public forums managed by the project.