The Bank of Israel Postpones Plans for National Cryptocurrency

The Bank of Israel Postpones Plans for National Cryptocurrency

Bank of Israel

Based on a recent report it was made known that the research study commissioned by the Israeli central bank to determine the feasibility of issuing a cryptocurrency referred to as “Digital Shekel” is now concluded. The report made it known that the bank has been advised to halt all actions geared toward the creation of the Central Bank digital Currency (CBDC) for the time being.

Creating of the Central Bank digital Currency (CBDC) Halted

A report has made it known that the proposed cryptocurrency was found to be unsuitable to the needs of the country’s residents in a number of areas and consequently the bank of Israel is strongly advised against issuing the Central Bank digital Currency (CBDC)

Reasons for shelving the digital shekel

A joint meeting which was chaired by the outgoing Boi Governor Dr.Karnit Flug, involving the teams from the Israeli finance ministry and the bank of Israel was held to examine the advantages and disadvantages of issuing an Israeli Central Bank digital currency (CBDC).

However, it is quite important to note that some positive outcomes of issuing the digital shekel to Israel’s economy have been examined. Being able to make instant payment as well as an increase in the government’s tax returns has been identified as one of the advantages attached to the issuance of the digital shekel.

The Topic is Likely to get Revisited

The BoI has also made it known that the possibility of having the token issuance topic revisited exist. However, this is not expected to take place in the nearest future.

An excerpt from the BoI’s announcement states that:
“the team does not recommend that the bank of Israel issue digital currency in the near future. It is necessary to continue to examine the field and also follow the development around the world before there are proper grounds for a decision to recommend issuing digital currency”. However, (according to Boi), no Central Bank in an advanced economy has so far issued a CBDC for general use.