Experimental Bank of Israel in Digital Shekel

The Bank of Israel issued a digital currency for the first in-house beta program before a digital shekel could be issued. Bank of Israel Deputy Governor Andrew Abir revealed this during a meeting two weeks ago to discuss the need for a digital shekel and its implications for the financial sector, Globes learned. The meeting heard that the digital currency will have huge impacts not only on the payments market but also on the entire financial market including the cryptocurrency sector, the blockchain and the banking system. Abeer spoke in response to criticism of the Bank of Israel over a call for proposals when the Bank of Israel’s potential issuance of a digital shekel was only theoretical. Related Articles Bank of Israel Moves Ahead with Digital Shekel Abir said, “Part of the enthusiasm of people outside the bank for our report on the digital shekel stems from the hope that digital currency will wipe out banks. I am sorry to tell you but this is not going to wipe out banks, nor will it bring A central bank is a digital currency with this goal. Banks are still an important part of any payment system that will exist. The second thing that might disappoint you is that a central bank digital currency will not come to protect Bitcoin. What we are talking about is a payment system. Bitcoin is not a payment system and it is not a currency. At best, it is a financial asset, and in the lowest-quality scenario it is a pyramid fraud. On the fight against money laundering, Abeer said: “The digital shekel will not be a reason for people to stop using cash if they want to evade taxes. Whoever wants to evade taxes will do so regardless of whether there is a central bank digital currency (CBDC) or not. , because he won’t use it. There are other ways to deal with the whole issue of black capital and crime, and CBDC is not the answer to that.” Abeer emphasized that there is a need to modernize the payments system in Israel, which is a decade behind other countries, especially Europe, but also some emerging markets. “I don’t know if CBD will happen in the next five years. When the governor put me at the head of the committee to examine CBDCs, which was a bit of a strange choice because I’m a traditional person in financial markets, and not exactly in this new field, I estimated that the chances of having a currency Central bank digitization in five years has been 20%. It has gone up quite a bit over the past year, mainly because other countries are focusing on it as well but there is still less than a 50% chance.” Published by Globes, Israel business news – en.globes.co.il – on June 21, 2021 © Copyright Globes Publisher Itonut (1983) Ltd. 2021