Bank of Israel revisits idea of issuing a digital shekel

Bank of Israel presented a working paper outlining the model and the benefits of the digital shekel for subsequent public consultations.

\n\n\n\n

The regulator stressed that it will decide on issuing a CBDC if the positive impact of such a decision outweighs costs and potential risks.

\n\n\n\n

The model envisages a two-tier structure. The central bank will provide digital shekels to private-sector payment service providers: banks, card issuers and fintech firms, including foreign ones. They will then distribute CBDC to the population.

\n\n\n\n

The Bank of Israel will provide minimal infrastructure based on DLT technology or a centralized registry and will lay the groundwork for competition among businesses.

\n\n\n\n

It is envisaged that at the initial stage the digital currency will not bear interest. The central bank will set limits on transaction size. In the future the digital shekel will be exchangeable for another CBDC.

\n\n\n\n

The public consultation period will end on July 31, after which the regulator will publish a report analyzing them.

\n\n\n\n

Israel first floated the idea of issuing a digital shekel in late 2017.

\n\n\n\n

In April 2021, PwC named the Bahamas and Cambodia leaders in the development of retail CBDCs. Israel did not make the top 10.

\n\n\n\n

Follow ForkLog news on Twitter!

“