The development of Central Bank Digital Currency [CBDC] across the globe has been carried out in full swing. Following the footsteps of its counterparts, Israel has been making headway in the CBDC game. According to a recent press release, the Bank of Israel has a plan outlined to roll out digital shekel [SHAKED].
The bank is currently working on an “action plan” to issue the CBDC. A decision on the launch of the digital shekel is still uncertain. However, in the document, the bank discussed why it is pertinent to issue a central bank-issued digital asset.
The Bank of Israel disclosed elements that would encourage a future decision to roll out a CBDC. According to the bank, stablecoin acceptance, competition in the local payment system, and CBDC issuances by other nations including the United States and the European Union fall under the “why” category.
Additionally, decreased cash transactions in Israel, along with advancements in technological payments also play an important role as a deciding factor. The statement also noted how the use of cash is still significant in Israel. Therefore, the bank intends to monitor the usage of cash by the public before launching the CBDC.
Israel takes important measures before rolling out CBDC
Issuing a new form of money isn’t as easy as it seems. Nigeria’s current financial state is a perfect example of the same. The country is currently forcing the use of eNaira among its citizens while limiting cash usage. This further caused violent protests across the country. China, on the other hand, took it slow and followed a step-by-step procedure before seamlessly issuing the digital yuan. Israel seems to be treading slowly. The latest press release further read,
“The Bank of Israel must be prepared to advance the issuance of a digital shekel if the variables listed above support it. The Steering Committee will therefore monitor the developments in the aforementioned aspects on a periodic basis.”