Why Israel is Trying to Curb Cash Usage Amid Crises and the Black Economy

Prof. Dan Amiram explains why the state is trying to reduce cash usage, noting that while cash transactions at points of sale have declined, the total amount of physical cash held by people has surged, particularly during crises like COVID-19 or the ongoing war.

"People feel that physical money in their hands is very safe, and perhaps rightly so. In the recent war, there were concerns about buildings collapsing and power outages—ultimately, using credit cards or transfers requires electricity," Amiram explains.

Furthermore, Israel's black economy—comprising unbilled transactions, bribery, drugs, and weapons—is estimated at roughly one-quarter of the country's total economy. Cash provides anonymity that fuels this illicit activity, prompting the state to enact legislation curbing its use.