tl;dr
The Bank of Israel has proposed a design for a central bank digital currency (CBDC) called the digital shekel (DS), which aims to cater to both retail and wholesale users. The potential CBDC is intended to serve as an alternative to cash for households and businesses, as well as enhance settlement s...
The Bank of Israel has proposed a design for a central bank digital currency (CBDC) called the digital shekel (DS), which aims to cater to both retail and wholesale users. The potential CBDC is intended to serve as an alternative to cash for households and businesses, as well as enhance settlement systems used by financial institutions. The central bank emphasized that discussions are preliminary and no final decision has been made on its issuance.
The announcement aligns with global efforts to explore CBDCs, with various countries and institutions, including China, the European Central Bank, and the Bank of England, advancing their own digital currency initiatives. The move reflects the ongoing transition of global financial systems toward digitalization.
The Bank of Israel first began exploring a digital shekel in 2017, and despite concerns over technological readiness and financial stability, it renewed its efforts in 2021 and conducted technical trials in 2022, testing smart contracts and interoperability features.
The Bank of Israel’s move aligns with broader global efforts to explore CBDCs, with proponents arguing for enhanced financial inclusion, improved cross-border payments, and modernized monetary policy tools, while critics warn of privacy concerns and potential state surveillance over financial transactions. The announcement places the Bank of Israel among the many central banks assessing the feasibility of CBDCs, reflecting the ongoing transition of global financial systems toward digitalization.