by Contributing Author
Since 2017, there have been ongoing discussions in Israel about the possibility of issuing a digital shekel cryptocurrency option. These efforts have recently been accelerated and a pilot run of this new cryptocurrency has already been conducted.
This news was confirmed recently by the Bank of Israel’s Andrew Abir. He currently serves as the bank’s deputy governor. Abir stated that a coin has already been issued when asked about the subject during a panel discussion that took place at IDC Herzliya’s Fair Value Forum. He did add that he was not currently leaning toward the optimistic side in terms of a full launch of a CBDC option through the central bank.
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Abir’s Take on the Possibility of a Full Launch of the Digital Shekel
The initial estimate made by Andrew Abir was that there was a 20 percent chance that the Bank of Israel would release a digital shekel within the next five years. Over the past year, his optimism about the possibility grew as he has watched other countries increase their efforts in this area. At the same time, he still only feels that there is around a 50 percent chance of this happening within the next five years.
An Ongoing Discussion Since 2017
As previously noted, the discussion around Israel’s release of a CBDC option has been ongoing since 2017. Since that time, there has been rapid global development in terms of the digital economy and the ability to make payments through the use of cryptocurrency. This factor is what has led the Bank of Israel to speed up its research into the launch of a digital shekel. Abir has stated that it is certainly an option that is still being investigated by the Bank of Israel as a possibility for the future.
To make this CBDC option a reality, blockchain technologies would be utilized. At the same time, the digital shekel cryptocurrency would differ from notable options such as bitcoin. As to where bitcoin and other similar cryptocurrencies are not regulated by a central authority, a digital shekel would be under the regulation of the Bank of Israel.
An Emphasis on Staying Current With Global Trends
Andrew Abir has noted that the desire to stay current with global trends is a motivating factor behind the Bank of Israel’s research into this topic of launching a digital shekel. At the current time, payment processing systems in Israel are still behind many other parts of the world. This is a gap that is starting to close and the last year has seen major efforts undertaken in this area.
Abir notes that disruptive technologies are playing a big role in the way that payment systems will work in the future. It is impossible to say who the overall winners will be but he is confident that digital currencies will not eliminate the need for banks. He points out that developing a digital shekel that is ready for a full launch will be done as a part of efforts to stay up-to-date in the world of payment systems. Because of this, any possible CBDC option issued by the Bank of Israel should be confused with cryptocurrency options such as bitcoin.