Bank of Israel said that they started working on issuing central bank digital currencies (CBDCs) and making arrangements in case it decides to issue a digital shekel. The central bank said it may consider issuing a CBDC if it could meet the needs of the future digital economy as well as provide more efficient cross-border payments. The Bank is preparing an action plan that benefits of issuing digital shekel outweigh the costs and potential risks.
The Bank of Israel examining the issue of Central Bank Digital Currencies (CBDC) Since 2017. Bank has not yet decided to launch a digital shekel. The Bank is asking for public comments on the matter through July. It has established a panel led by its deputy governor, Andrew Abir, to study its feasibility.
The central bank outlines a draft model which does not represent decision regarding characteristics of digital shekel should any be issued. It is the basis for a discussion and examination of the professional community in Israel. The central bank includes all major economies have significantly increased of issuing CBDC as means of payment. For Example, China piloting its digital yuan project in major cities across the country.
The central bank may use distributed ledger technology (DLT) such as blockchain when designing and establishing a CBDC system. There is an essential difference between CBDC and cryptocurrencies such as bitcoin. The country’s central bank will issue CBDC and it would determine its quantity and manner of use.
Bank of Israel steering committee has mapped advantages that Israel’s digital currency may generate for the Israeli economy if it issued in the future.
