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The Shylock subplot of Merchant of Venice turns on a contract for the lending and repayment of money. The Jews were a group of people notoriously involved in this business (banking). It thus made sense to have the moneylender be a Jew. In addition, Jews were treated contemptuously by European society, which fact is referred to in the play and provides Shylock with a motivation and allows his humiliation and destruction at the end.

Merchant of Venice is the only one of Shakespeare's plays to have Jewish characters in it, and they are there for a reason. Contrast this with Christopher Marlowe's play The Jew of Malta, in which the Jewish villain is just villainous without any subtext or explaination.

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