Public Consultations Reveal Positive Interest in Bank of Israel’s Digital Shekel

Public Consultations Reveal Positive Interest in Bank of Israel’s Digital Shekel – The central bank of Israel conducted a survey that received mainly encouraging answers from stakeholders regarding the possibility of issuing a digital shekel currency. According to the regulator, many of the people who took part in the public consultations are in favor of the project’s ongoing development.

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Israel’s monetary authority recently released a report summarizing the results of public consultations done to obtain feedback on its central bank digital currency (CBDC) project. The regulator said it received 33 responses, half of which came from outside the nation and the remainder within the country’s fintech community.

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The majority of respondents backed the plan to issue a digital shekel, citing benefits such as the ability to boost competition in the payments system. The new infrastructure of the digital currency might then spur innovation in Israel’s payments system, which critics argue is already highly centralized and has high entry hurdles.

Many participants believe that promoting financial inclusion, which the Digital Shekel Steering Committee sees as an added advantage, should be a primary motivator for the CBDC’s issue. Others have stated that expanding the fintech industry and lowering cash system costs should also be a priority.

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The issue of privacy has divided respondents, with some arguing that the digital shekel should have cash-like features that provide complete anonymity and others advocating for some level of transaction confidentiality while adhering to anti-money laundering regulations so that efforts to combat the unreported “black” economy are not hampered.

Public Consultations Reveal Positive Interest in Bank of Israel’s Digital Shekel – Additional use cases for the digital shekel have been offered by a number of participants, including the transfer of government funds, such as through designated tokens that would permit payments for specific reasons. Institutions and non-government groups could use the CBDC for specific transfers in two areas: food supply and healthcare.

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The Bank of Israel has stated that it may create its own digital currency towards the end of 2017. The project was put on hold the following year, but work began in the spring of 2021 when the regulator created a CBDC model, with the majority of answers advocating the use of distributed ledger technology.

The Bank of Israel has yet to make a final decision on the digital shekel, although it stated in March that the currency does not pose a threat to Israel’s financial system.

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