Where does Israel stand with its stablecoin plans?

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In November 2017, the Bank of Israel put up a working group to identify the needs and possible launch of a government-backed digital coin, or a stablecoin.

The group examined certain advantages and disadvantages of Israel issuing a stablecoin and concluded that the country should wait until more governments around the world introduce their own stablecoins.

According to News Bitcoin and the report from the study indicates the main advantages of introducing the “e-shekel” mainly from the viewpoint of the Bank of Israel. Some of the advantages include: easy access to liquidity, if cash usage decreases, more efficient payment system and a powerful economic tool once the e-shekel generates interest.

All of these and the other advantages pointed out are typical for government-backed digital coins. One of the more controversial points is that while the e-shekel will help Israel move more business out of the grey economy, it can actually put citizens in greater government control, since the coin will be backed by the state and essentially controlled by it, as well.

One of the other disadvantages is the not so technologically literate Israeli citizens, who might struggle with the e-shekel and its usage.

While the advantages certainly outweigh the risks related to the launch of the e-shekel, the fact that there is such contract between private and public institutions in Israel in terms of their technological knowledge and embracement of new, savvy e-solutions is the major reason why Israel is putting off the launch of the stablecoin for now.

The approach for now is wait-and-see. Israel is essentially waiting for any developed country to launch their own stablecoin. Once they see traction and mass adoption, or at least some adoption, they may move on and launch the e-shekel.

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