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The Bank of Israel is accelerating its research into central bank digital currencies (CBDCs) and making preparations in case it decides to issue a digital shekel.
The bank is readying an action plan so it will be prepared should the benefits of issuing a national digital currency outweigh the costs and potential risks, the central bank.
It believes a CBDC would allow a payment system that could adapt to a digital economy, as well as create an efficient and inexpensive infrastructure for cross-border payments.
The central bank further called for comments on its draft model, which it said does not represent any decision regarding the currency’s characteristics, but is merely the basis for a discussion.
The Bank of Israel has been discussing a CBDC since 2017. Elsewhere, Sweden’s Riksbank and the European Central Bank are actively researching and developing their own digital currencies in preparation for expected launches in the next four to five years.
The U.S. Federal Reserve is taking a more cautious approach and carrying out experiments with no firm commitment to date
Then there’s China, which is reportedly close to the launch of its digital yuan and is already testing the CBDC with commercial institutions and the public.
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