Israel’s New Study on Public Interest in Adopting CBDC: A Critical Analysis
Recently, a meeting was held at the KPMG offices in Tel Aviv to discuss the results of a study conducted by the Bank of Israel on the public’s interest in adopting a Digital Shekel (CBDC). The study, conducted by the “Roschink” research institute and published on the Bank of Israel’s website, revealed some interesting findings.
Key Points from the Study:
Dr. Nir Yaacobi from the Digital Shekel team at the Bank of Israel revealed that the study included around 1,000 participants who were randomly selected to represent all population segments. However, there were some methodological issues identified in the study, such as the sampling method using online panels, underrepresentation of certain groups, and risks like loss of privacy and government overreach being underrepresented.
Moreover, the study did not comprehensively address potential risks for end users, like state control over financial behavior, loss of privacy, and restricted access to funds. The implications of transitioning to a digital currency for cash-based communities, especially the ultra-Orthodox and senior citizens, were also not explicitly discussed.
The Trust Factor and Public Awareness:
The study showed that 70% of participants expressed trust in the Bank of Israel. However, concerns were raised about potential government control over user data and the lack of a comprehensive public awareness campaign about the risks and downsides of a digital shekel system.
Looking at the Global Landscape:
Ben Benakot of KPMG Israel presented developments in the CBDC space globally, noting that most countries are exploring CBDC solutions. However, advanced Western countries have not yet launched CBDC systems, and the Bank of Israel is monitoring the EU central bank as a model.
Balancing the Narrative:
In closing, a study conducted in the EU revealed challenges hindering the adoption of the digital euro, and the high adoption rate of China’s e-CNY was attributed to a top-down market strategy. The importance of presenting a balanced narrative and raising public awareness about the risks and benefits of a digital shekel system was emphasized.
Conclusion:
As Israel enters uncharted territory in choosing a digital financial solution, it is crucial to openly present both the risks and benefits of a digital shekel system to ensure an informed public can participate meaningfully in the conversation and make relevant choices about their lives.
In conclusion, transparency and public awareness are essential in the implementation of a digital shekel system to ensure the public’s trust and understanding of the implications.