One in three Israelis has a high interest in a digital shekel, a new study by the Bank of Israel (BOI) has found.
Titled “The Willingness of the Public to Adopt a Digital Shekel,” the report found that a further 17% of respondents have an intermediate interest in central bank digital currency (CBDC). 37% of the respondents reported low interest, while the rest were unsure.
BOI has been exploring a digital shekel for years now, but it has yet to commit to developing one. In a 2023 report, the central bank stated it would be more inclined to issue a digital currency if the EU or the U.S. launched theirs. With Trump ascending to the presidency in the U.S., that ship has sailed, at least for now, but the EU is still on course to launch a digital euro.
In Israel, older citizens were the most interested in the CBDC. Two in three respondents aged over 60 expressed high interest, with only 43% interested in the 18-29 age group. The latter demographic was the only one in which those with low interest were more than those highly interested.
Male respondents with higher income and non-university graduates recorded higher interest than their counterparts.
Interest was also notably higher among Israelis who owned digital assets at 69.5%, compared to 50% for those who had never interacted with digital assets. This contrasts with the narrative from ‘crypto bros’ that digital asset owners are overwhelmingly opposed to CBDCs, which they consider a ploy by the government to spy on its people.
Israelis want a CBDC that pays interest
Quick, convenient and efficient payments were the most cited benefit of a digital shekel, despite over 87% of the country’s payments being digital. Accessibility, a better alternative to cash and “can’t be lost” also ranked highly.
Being a developed nation where most citizens have access to banking services, Israel’s CBDC hasn’t been targeting financial inclusion. However, the central bank has proposed paying interest on digital shekel holdings to the public, an unorthodox approach that commercial lenders have fiercely opposed.
The study showed that while the lenders may be against this approach, it has the unwavering support of the consumers. “Possibility of receiving interest at a rate of 3.5% on your balance” was only second to protection against fraud as the feature most Israelis like about a CBDC.
Other features that matter to Israelis include offline payments, zero fees for basic functions, universality and acceptance and programmable payments. Some respondents also called for no holding limit on the digital shekel. This would be yet another departure from the global norm, where central banks have proposed holding caps to prevent commercial bank disintermediation.
Cyberattacks, slow transactions, and difficulty using the CBDC were the most cited disadvantages.
Hong Kong’s digital asset embrace continues
In Hong Kong, the city-state’s securities watchdog is expanding its embrace of digital assets, green lighting new products this year.
The Securities and Futures Commission (SFC) revealed that it would launch a new licensing regime for over-the-counter trading to boost market efficiency. It also intends to expand its licensing for custody services and review its rules around derivatives trading and margin financing options.
Hong Kong has emerged as a global leader in digital assets, with its enabling laws attracting some of the world’s largest players. The latest is the global exchange Bullish, which received a license on February 18 to operate as a virtual asset trading platform.
“We believe that clear regulation is crucial for fostering trust in the digital asset industry, and we will continue to invest our efforts in expanding the compliant and regulated environment that Bullish Exchange has offered our customers and channel partners from day one,” commented CEO Tom Farley.
Despite the leaps, the SFC believes its regulatory regime is still “restrictive in scope,” CEO Julia Leung stated on February 19.
“We have to think how are we going to provide a regulatory framework for growth which allows for responsible innovation,” she stated during a digital asset conference held in the city.
Watch: Finding ways to use CBDC outside of digital currencies
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Source: https://coingeek.com/34-of-israelis-have-high-interest-in-cbdc-survey/