JERUSALEM–Israel’s central bank said it is once again considering issuing a digital shekel that would create a more efficient payments system.
The Bank of Israel began to consider the possibility of issuing a central bank digital currency (CBDC) in late 2017 but a year later a team established to study the matter recommended against issuing a CBDC in the near future, according to Reuters.
Now, the bank said that due to rapid developments in the digital economy and with other central banks considering digital currencies, the Bank of Israel “is accelerating its research and preparation” for a potential issuance of a digital shekel, the report stated.
The Bank of Israel is asking for public comments on the matter through July and has established a panel led by its deputy governor to study its feasibility and how a digital shekel would benefit the economy, Reuters said.
“Similar to many other central banks, the Bank of Israel has not yet decided whether it intends to issue a digital currency,” the bank said.
Preparation for Future
It noted, however, that central banks in major economies have boosted research on CBDCs as another means of payment and creating a new technology to keep up with the digital economy, Reuters added.
The central bank added that it is preparing an action plan should “conditions develop in the future that would lead to a Bank of Israel assessment that the benefits of issuing a digital shekel outweigh the costs and potential risks”.