Bank of Israel moves forward on digital shekel

Shekel

The Bank of Israel's plan of action represents a reverse in policy from three years ago, when it recommended not issuing any digital currency.

The Bank of Israel steering committee, headed by Deputy Governor Andrew Abir, is intensifying efforts to examine the possibility of issuing central bank digital currencies (CBDC) - the digital shekel.

The committee today issued a draft model, which discusses the characteristics of any such future digital shekel, although it stresses that it has not yet finally decided whether to issue such a digital currency. In any event the plan of action represents a reverse in policy from three years ago, when it recommended not issuing any digital currency.

In 2017, previous Bank of Israel Governor Dr. Karnit Flug set up a committee to examine digital currencies, which ruled out issuing a digital currency "in the near future." But clearly the Bank of Israel has not been able to sit by and indifferently watch the major changes in the Israeli and global payments market (such as the entry of Apple pay into Israel last week). The Bank of Israel is also aware that other central banks worldwide are considering issuing digital currencies and therefore, "In view of the major central banks’ work on the issue, the Bank of Israel is accelerating its research and preparation for the potential issuance of a digital shekel."

The Bank of Israel added, "A digital shekel could generate various benefits for the Israeli economy, but issuing it also involves risks. The Bank of Israel is preparing an action plan so that if conditions develop in the future that lead to a Bank of Israel assessment that the benefits of issuing a digital shekel outweigh the costs and potential risks, the Bank of Israel will be prepared to put this plan into action."

Published by Globes, Israel business news - en.globes.co.il - on May 11, 2021

© Copyright of Globes Publisher Itonut (1983) Ltd. 2021

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