Israel gradually preparing for CBDC launch

Alongside several other central banks, it has been reported that The Bank of Israel is taking gradual steps in preparing for the launch of its very own central bank digital currency (CBDC). The currency in question for Israel is the digital shekel.  Though the money regulator has stated that the central bank has accelerated its plans to launch the CBDC, the establishment itself has stressed that it has no firm steps laid out at this moment in time.

The official announcement stated that:

It is important to emphasize: Similar to many other central banks, the Bank of Israel has not yet decided whether it intends to issue a digital currency.

The regulator is only preparing a cautionary plan of action, designed to guarantee its readiness to launch a CBDC in case the relevant scenario did happen to present itself. The action plan’s ultimate focus would be to complete a full assessment of both the risks and benefits of this kind of digital fiat. Officials are aware that the impact of the CBDC would likely have an enormous effect on Israel’s already established monetary system.

Israel gradually preparing for CBDC launch

Speaking of the plan of action, 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 began to assess the possibility of a digital currency way back in 2017. Today, the central bank can be seen to be curating a steering committee, set to be headed by the Deputy Governor of The Bank of Israel, in an attempt to fully assess the possibility of issuance surrounding the launch of a digital shekel.

The central bank is also seeking comments on its recently released draft model to kickstart discussions.  However, it was apparent in highlighting that the draft is not an accurate representation of the characteristics of the currency.

Even though many other large economies are said to be developing their work on CBDCs, China remains the only economy to hold concrete plans to release its digital yuan. Though a launch date has not been confirmed, The People’s Bank of China has reportedly run digital currency pilots for around an entire year.

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