The Bank of Israel plans to introduce its central bank digital currency (CBDC), the digital shekel.
The central bank has disclosed plausible justifications for a hypothetical future issuance of digital shekel called “SHAKED”.
In a press release issued on April 17, the Bank of Israel Steering Committee on the Potential Issuance of a Digital Shekel described the strategy for issuing a digital shekel called “SHAKED.”
Although the choice has not yet been made, the central bank provided some possible justifications for the issuing of a CBDC.
Potential justifications Bank of Israel CBDC
The Bank of Israel disclosed elements that would encourage a future decision to issue a CBDC.
This includes
- stablecoin acceptance,
- competition in the local payment system,
- CBDC issuances by other nations including the United States and the European Union, decreased cash transactions in Israel, and
- technical advancements in payments.
The potential of retail central bank digital currencies (CBDCs) has recently been investigated by the central banks of Israel, Sweden, and Norway as part of the “Icebreaker” project run by the Bank for International Settlements (BIS) Innovation Hub.
The Hong Kong Monetary Authority and the Bank of Israel previously collaborated on a trial to test a new digital currency issuance in the territory.
With CBDCs, the G20 countries are attempting to streamline and reduce the cost of cross-border payments.
Yoav Soffer, project manager for the Bank of Israel’s CBDC, remarked that if a worldwide infrastructure is in fact created, a digital currency issued by the Bank of Israel will enhance Israelis’ ability to send money across borders.
It should be noted that G20 has earlier released a framework for global crypto adoption and regulation which might trigger the release of “SHAKED” by Bank of Israel.
Though there is no stipulated time when digital shekel will be released but based on the justifications and requirements set by Bank of Israel, the digital shekel might be released quite soon as other countries are already pilot testing while few of the requirements are already in motion like technical advancements in payments.
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