Public Attitudes towards CBDC: Insights from a Survey Experiment

As central banks around the world weigh the potential of central bank digital currencies (CBDCs), our recent study offers critical insights into public receptiveness and preferences regarding such a digital transformation in Israel.

Commissioned by the Bank of Israel, our research examined the willingness of the Israeli public to use digital shekels (DS), should the Bank decide to issue one. The study was conducted via an online survey among a random, representative sample of the population. It assessed the level of willingness to use DS, the features that could enhance use, and the influence of socio-demographic and personal characteristics.

General Interest in a Digital Shekel

Over half of the respondents (51.57%) expressed a high level of interest in using DS, with 34% indicating particularly strong interest (8–10 on a 10-point scale). This result suggests a high potential for DS adoption among the Israeli public.

DS Features That May Enhance Use

In open-ended questions, participants cited convenience as the most prominent advantage of a DS, highlighting ease of use, accessibility, and relief from handling cash. Other, less frequently mentioned advantages included the Bank of Israel’s backing and security of the currency. Privacy was ranked considerably lower in importance.

On the other hand, the main concerns voiced were related to cybersecurity and information security, followed by potential usability issues and lack of accessibility for certain populations. Privacy concerns were not among the leading reservations.

In the next stage, participants evaluated a closed list of possible DS features, including several that had not emerged spontaneously in the earlier responses. Two features stood out as especially influential in increasing willingness to use DS: protection against fraud and system errors, and the possibility of earning interest on holdings. Other valued features, in descending order, included: absence of fees for basic transactions, broad merchant and institutional acceptance, offline functionality, smart payment capabilities, immediate wallet debiting, transactional privacy from the Bank of Israel, and unlimited holding amounts.

Another part of the research focused on attitudes toward cash, exploring three common reasons why people may prefer to hold or use it: (i) distrust in the stability of commercial banks, (ii) privacy concerns, and (iii) the immediacy and finality of payments.

We hypothesized that if these characteristics were important to respondents in the context of cash, they would similarly influence interest in DS and affect its adoption.
However, this hypothesis was not supported by the data: none of these three factors were found to correlate with a higher level of interest in DS.

To better understand the relative importance of certain DS features, we conducted a conjoint analysis, a statistical method widely used in market research to isolate the weight of individual product attributes. Respondents were shown several DS scenarios, each combining different feature sets. The features tested in this analysis were:

• Protection against fraud and system errors (free vs. fee-based fraud protection)
• Maximum holding amount (10,000 shekel vs. 50,000 shekel)
• Interest on balance (3.5% vs. none)

The analysis confirmed that free fraud protection and interest on balances were the most influential features. The size of the holding cap was comparatively less important. In summary, the most important features for encouraging DS adoption, across all parts of the research were: free protection against fraud, interest-earning potential, and convenience of use.

User Profiles: Who Is Most Likely to use DS?

Higher interest in DS was observed among men, older people, and higher-income groups. Interestingly, individuals without academic degrees showed slightly greater interest than graduates.

Personal attributes were also important predictors: those with high financial and digital literacy, a self-perception of being tech-savvy, ownership of cryptocurrencies, and a risk-seeking disposition, all demonstrated higher levels of interest. Moreover, a strong level of trust in public institutions, especially the Bank of Israel, was closely correlated with willingness to use DS.

International Comparison

While most findings align with similar studies conducted by other central banks, two key differences emerged:

Privacy: in Israel, privacy was not seen as a major concern, in contrast with other jurisdictions where privacy often ranks among the top public priorities.

Age: willingness to use DS increases with age in Israel, particularly among individuals over 40, whereas in other countries, interest is often higher among younger populations.

In Summary

By illuminating the preferences, concerns, and demographic patterns that shape public attitudes toward digital currencies, our research not only guides the design of a future Digital Shekel but also offers valuable lessons for central banks worldwide seeking to ensure broad and effective adoption of CBDCs.

Prof. Ruth Plato-Shinar is a Professor of Banking Law and Financial Regulation at Netanya Academic College, Israel.

Dr. Libby Maman is a Post-doctoral Researcher at the Institut Barcelona d’Estudis Internacionals (IBEI). 

Adv. Lilah Shema Zaltokrilov is a Senior researcher, Finance Division - Macroprudential Unit at the Bank of Israel.

Dr. Nir Yaacobi is a.

The complete research can be accessed here:  https://www.boi.org.il/en/communication-and-publications/press-releases/17-2-25-en/