The Central Bank noted that the decision on the introduction of CBDC has not yet been made, so the proposed project should be considered preliminary.
Updated March 4, 2025, 16:37 UTC Published March 4, 2025, 16:21 UTC
What you should know:
- The Bank of Israel has presented a possible draft of a CBDC in case a decision is made to implement it in the future.
- The central bank described the proposed digital shekel (DS) as a “multifunctional central digital currency” intended for both retail and wholesale use.
- Central banks in most developed countries have been exploring the possibility of introducing CBDCs for several years now.
The Bank of Israel has proposed a potential central bank digital currency (CBDC) project in case a decision is made to implement it in the future.
In a document published Tuesday, the central bank described the proposed digital shekel (DS) as a “multifunctional central currency” that would be designed for both retail and wholesale use.
“DS will become a multifunctional digital currency that will meet both the retail needs of end users such as households and businesses, and the wholesale requirements of financial institutions,” the article says.
The Bank of Israel will thus provide a digital analogue of cash and modernise the existing settlement system used by financial institutions by adding smart features such as composability and programmability.
The Central Bank also stressed that the decision on the need to issue a CBDC has not yet been made. Therefore, the project presented in the article should be considered only preliminary.
Central banks in most developed economies around the world have been exploring the possibility of issuing CBDCs for several years now.
While their proponents argue that they serve as a tool to increase financial inclusion and protect fiat currencies from the decline of cash in the future, they have also been criticized by those who see them as a means of increasing government control over monetary transactions.
