Israel’s apex bank plans digital shekel

The Bank of Israel is monitoring various scenarios that may impact its decision on whether or not to issue a digital shekel (SHAKED), including the widespread use of stablecoins. In a recent report by the central bank’s steering committee on the potential issuance of a digital shekel, it was made clear that no decision has been made on the issuance of a central bank digital currency (CBDC). Although 90% of central banks worldwide are examining CBDCs, only a few have actually issued one, the report noted in its 21-page paper.

Israel, Norway, and Sweden, along with the Bank for International Settlements, have completed a study on the use of CBDCs for international retail and remittance payments. The Bank of Israel will continue to observe the issuance of CBDCs in the United States and the European Union, as well as the decline in the use of cash, the rise of stablecoins, competition in the domestic payment system, and technological advancements in payment systems.

According to the announcement, “The Bank of Israel must be prepared to advance the issuance of a digital shekel if the variables listed above support it.” By carefully considering the latest trends and technologies, the Bank of Israel hopes to make an informed decision that will benefit the country’s financial sector.

In summary, the Bank of Israel is closely watching the development of digital currencies and other emerging technologies, including stablecoins, and considering their potential impact on the issuance of a digital shekel. The central bank has not yet decided whether to issue a CBDC, but it will continue to monitor global developments and advancements in the payment system. If the circumstances are favourable, the bank will be ready to take the necessary steps to issue a digital shekel.