For quite a few years cyber was the poster child of Israeli high tech, but in recent years it has had a real rival: fintech, which deals with financial technology. An impressive list of startups in this field have raised large sums, and in the past year the most well endowed and strongest of them have gone public at the New York Stock Exchange. These companies and others like them have made fintech one of the pillars of the innovation industry. Throughout the world, many eyes carefully watch any new Israeli fintech company. The first Israeli decacorn (a company worth $10 billion) will likely emerge from this field. 

In 2021, investments in Israeli high tech reached more than $25 billion, 2½ times the amount from 2020, with fintech leading the field, overtaking cyber and reaching a peak of investments at $6.6 billion. 

The sharp global rise in fintech investment, including in Israel, stems from several factors. The first is the change in the last two years in governments’ treatment of digital coins. The Chinese Central Bank has started operating a local digital coin called e-Renminbi (e-RMB) in Shenzhen province as an experiment. The Singapore Monetary Authority has for the first time issued two licenses for digital banking, and central banks, including the Federal Reserve, the European Central Bank and the Bank of England, have formulated a plan and requirements to start circulating digital coins.

There is some movement in Israel in this field, although it is slow. In May 2021, the bank presented an infrastructure and a plan to issue an official Israeli digital coin. In the model the bank presented for public comment, the relationship between the digital shekel and the “regular” shekel, in cash or a bank account, would be one to one — the worth of the digital shekel would be exactly that of a “regular” shekel. The bank would not operate the digital coin itself but would allow private providers to offer the service to clients.