Israelis Hoard Billions in Cash Amidst Declining Trust in Institutions
Translated & summarized from Globes by baba
Israelis are holding a record 129 billion shekels in cash, a trend that has accelerated in 2026 despite government efforts to reduce its use. The Bank of Israel views cash as essential for emergencies, while critics point to its use in illicit activities and as a form of tax rebellion. Meanwhile, a commercial space in Tel Aviv is being converted into a fashion museum, and schools in Kiryat Ata were evacuated due to refinery pollution.
The story in 6 lines · by baba
- Israelis are holding a record 129 billion shekels in cash, with usage accelerating in 2026.
- Cash usage is significantly higher in the Arab sector (75%) compared to other populations.
- Government attempts to curb cash use have stalled, with the Bank of Israel citing its emergency utility.
- A proposed law to criminalize holding over 200,000 shekels in cash did not pass.
- A Tel Aviv commercial space is being repurposed as Israel's first Fashion Museum.
- Schools in Kiryat Ata were evacuated due to high benzene levels from a nearby refinery.
Israeli police recently displayed thousands of 200 shekel banknotes allegedly linked to Meital Saar, wife of the mayor of Kfar Saba. This incident highlights a broader trend of increasing cash circulation in Israel, despite government efforts to combat illicit finance. A proposed law in the last "Arrangements Law" would have criminalized holding over 200,000 shekels in cash, but it did not pass. Prime Minister Netanyahu and Foreign Minister Saar have publicly advocated for removing large denomination bills from circulation to fight black market money, crime, and even Hamas, but the initiative stalled due to a lack of professional justification from the Bank of Israel.
Despite the rise of digital payments, cash held by the public reached a record 129 billion shekels by the end of the first half of 2026. This figure excludes an additional 430 billion shekels in current accounts. The Bank of Israel reported a 3.5% increase in cash held by the public from January to June 2026, a significant acceleration compared to previous years. This trend contrasts with past efforts, like the Locker Committee's recommendations over a decade ago, which aimed to significantly reduce cash usage and led to a 2018 law limiting cash transactions to 11,000 shekels, later reduced to 6,000 shekels.
The Bank of Israel, in its recent review, downplayed the negative aspects of cash, emphasizing its role as an essential payment method, especially during emergencies or disruptions to critical infrastructure. They noted that some countries, like the UK and Sweden, are even enacting legislation to ensure cash accessibility. However, data reveals significant disparities in cash usage, with Arab citizens reporting 75% of their expenses in cash, compared to 29% in the Haredi (ultra-Orthodox) sector and 15% in the general population. This disparity may stem from a lack of alternative financial services in certain communities, but the article suggests it could also reflect a growing sentiment of distrust in the government, leading some to view cash payments as a form of tax rebellion.
In unrelated news, the Azrieli Group is transforming a struggling commercial space at the entrance to Tel Aviv into Israel's first Fashion Museum to attract visitors. Separately, two schools in Kiryat Ata were evacuated due to unusually high levels of benzene detected near the Bazan oil refinery, prompting environmental protection authorities to advise residents within a kilometer radius to limit outdoor activity.
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