Israel CBDC plans on hold ahead of potential digital euro launch

As a crypto investor with a background in finance and technology, I’m keeping a close eye on the developments of central bank digital currencies (CBDCs) around the world. The news that the Bank of Israel is taking a cautious approach and waiting to observe the European Central Bank’s decision on the digital euro before making its own moves strikes me as a prudent strategy.

The Bank of Israel expressed no urgency to introduce its digital shekel, preferring instead to closely monitor the progression of the European Central Bank’s plans for a digital euro before taking action.

As a crypto investor following the developments in Israel, I’m keeping a close eye on the Central Bank of Europe’s decision regarding their digital currency. The Central Bank of Israel is currently in a wait-and-see mode, preparing to make its own move on the digital shekel once Europe makes theirs.

During an interview with Reuters, Deputy Governor Andrew Abir of the Bank of Israel expressed interest in observing the European Central Bank’s (ECB) upcoming decision regarding the potential launch of a digital euro by around 2027.

“Abir raised the crucial issue of whether the general population will embrace a digital currency. He noted that there’s a substantial gap between theoretical studies and getting people to actually use it. The Bank of Israel began investigating the digital shekel back in 2017, evaluating both the prospective advantages and difficulties involved in introducing a central bank digital currency (CBDC).”

During the initial stage, we explored major developments in the digital currency market, assessed the technical viability, and considered potential implications for monetary policy and financial security. In the year 2021, the Bank of Israel intensified its exploration by forming a specialized team to delve deeper into the digital shekel project.

As a central bank analyst, I’m excited to share that in late May, the Bank of Israel initiated the Digital Shekel Challenge. This invitation was extended to various sectors, encouraging them to design applications for a prospective central bank digital currency. The objective of this pilot project is to experimentally evaluate the functionalities of a digital shekel prototype. By simulating its core system and API layer, we’ll gain valuable insights into how this potential currency could operate in practice.

As a researcher, I’ve come across Abir’s perspective that the central bank intends for CBDC (Central Bank Digital Currency) to establish a fair competition landscape among payment providers. By introducing a digital currency, smaller payment providers could potentially challenge financial lenders in the market.

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2024-07-10 16:08