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December 5, 2022
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Israel’s central bank is working on CBDC –

Israel’s Central Bank is accelerating research into the potential issuance of the Central Bank’s Digital Currency (CBDC). The institution thus follows China and the European Union.

Israel’s central bank is researching the topic of CBDC

In my statement The central bank said it is currently preparing an action plan to explore the benefits of the digital shekel to the economy. While the bank says it has yet to make any decisions as to whether or not to issue a central bank’s digital currency, it added that it wanted to be prepared for the process should it prove to be of benefit. “Outweigh the costs and the potential risks.”

The central bank also added that it might consider issuing a CBDC if it could meet the needs of the future digital economy as well as ensure more efficient cross-border payments. In addition, the institution hopes to reduce the use of cash and ensure that the public can make payments from “A certain level of privacy.”

It is worth adding that Israel’s central bank has been considering the introduction of CBDC since 2017, when the authorities established an inter-ministerial group to investigate the issue. The following year, the team recommended the Bank of Israel to issue a digital currency. The government wanted to be a pioneer in this matter.

No advanced economy has yet released digital currency for wide use

– it was stated then.

CBDC in the world

Today, however, there are many indications that China will be the first major economy to be released by CBDC. A pilot program of the project is being carried out in the Middle Kingdom. In major cities across the country, elected citizens can now pay with digital yuan.

As we wrote earlier, however, the digital yuan does not arouse enthusiasm. The Chinese point out that it does not stand out with anything positive compared to other e-payment applications. They are also concerned that the new payment model may reduce their privacy.

Zennon Kapron, managing director of Singapore-based consulting firm Kapronasia, says the Chinese government will force citizens to use digital yuan. He added that the digital currency of China “Probably won’t increase” yuan share in commercial transactions “By much more than 1 percentage point.”

Let us add that the Bahamas are the first country to issue its own CBDC – Sand Dollar – in October 2020.

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