Israel Plans CBDC but Is Unsure If or When It Would Launch
Israel’s central bank is working on a national digital currency, but it’s unclear if or when a central bank digital currency (CDBC) would roll out.
Bank of Israel Governor Amir Yaron said at a conference that his organization is moving ahead with its plans for a digital shekel, pointing to a need to improve the country’s payment systems, Reuters reported Tuesday (Sept. 12). However, he would not say when such a currency would be created.
“Whether or not we will issue a digital shekel is still an open question, as it is in most if not all other advanced economies,” he said. “Either way, we remain committed to be at the frontier, and more than that, to support the effort of pushing the frontier, in our CBDC explorations, as well as in our efforts to modernize and advance our payment systems ... and the financial system in general.”
Israel first expressed interest in issuing a CBDC in 2017 and stepped up its research in 2021, per the report. Those efforts put the country in the company of 93% of the world’s nations, who are in at least the research stage of a CBDC project.
That’s according to a survey released in July by the Bank for International Settlements (BIS), which found efforts to launch digital currencies increasing as short-term CBDC issuance is waning.
“The survey suggests that there could be 15 retail and nine wholesale CBDCs publicly circulating in 2030,” BIS said, pointing out that work on retail CBDCs is making more progress than projects to develop wholesale coins.
Central banks aren’t the only ones backing CBDCs; private companies are also supporting them.
Aptos Labs partnered with Microsoft last month, for example, to explore “asset tokenization, payments and [CBDCs] that will further advance the adoption of Web3 from financial services enterprises.”
The idea of sovereign digital currencies has gained traction as the world increasingly embraces digital transactions.
“There are many technical benefits you have with a digital currency that you just can’t do with traditional money,” James Wallis, vice president of central bank engagement at enterprise crypto solutions provider Ripple, told PYMNTS in an interview posted this month. “Things can move more quickly, with more certainty.”
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