Public Consultations Reveal Positive Interest in Bank of Israel’s Digital Shekel – Finance Bitcoin News

Surveys by Israel’s central bank have largely returned positive feedback from all stakeholders about the possibility of issuing a digital shekel. The regulator stated that many of those who participated in public consultations supported the development of the project.

Bank of Israel Announces the Results of Consultations for Digital Shekel Project

Israel’s monetary authority has recently published a paper detailing the outcome of public consultations held to gather opinions from interested parties on its central bank digital currency (CBDC) project. The regulator announced it had received 33 responses, half of which from abroad and the rest from the country’s fintech community.

The plan to issue a digital Shekel has been supported by most respondents. They point to several advantages, such as the possibility to promote competition in the payment market. Then, the digital currency’s new infrastructure could spur innovation in Israel’s payments system, which critics say is now quite concentrated and features high entry barriers.

Participants believe that the main reason for issuing the CBDC should be to promote financial inclusion. This benefit was considered by the Digital Shekel Steering Committee as an added benefit. Some participants suggested that investing in fintech and decreasing cash cost should also be priorities.

The question of privacy has split the respondents, between those that insist the digital shekel should have cash-like features providing full anonymity and others who support some level of transaction confidentiality while maintaining anti-money laundering rules so that efforts to combat the unreported “black” economy are not hampered.

Participants also proposed additional uses for the digital shekel, such as the transfer government payments through designated tokens. These would allow payments for certain purposes. The CBDC could be used by institutions as well as non-government organisations to transfer funds in specific areas, such as healthcare and food supply.

Bank of Israel announced it’s considering launching its own digital currency towards the end of 2017. After the project was ended in 2017, work on it resumed in spring 2021. The regulator created a model for the CBDC and received overwhelming support. Bank of Israel is yet to make a final decision on the digital shekel but in March it said it did not see the currency as a threat to the nation’s banking system.

Is it possible that Israel might eventually release a digital copy of its fiat currency? Leave your comments below.

Lubomir Tassav

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.