The Bank of Israel is accelerating its research into central bank digital currencies (CBDCs) and making preparations in case it decides to issue a digital shekel.
- The bank is readying an action plan so that if the benefits of issuing a national digital currency outweigh the costs and potential risks, it will be prepared, the central bank said Tuesday.
- It believes a CBDC would allow a payment system that could adapt to a digital economy, as well as create an efficient and inexpensive infrastructure for cross-border payments.
- The central bank further called for comments on its draft model, noting it does not represent a decision regarding the currency's characteristics, but provides the basis for a discussion.
- The Bank of Israel has been examining the introduction of a CBDC since 2017.
- Elsewhere, Sweden's Riksbank and the European Central Bank are actively researching and developing their own digital currencies in preparation for expected launches in the next four to five years.
- The U.S. Federal Reserve is taking a more cautious approach and carrying out experiments with no firm commitment to date.
- Out ahead is China, which is reportedly close to the launch of its digital yuan, and is already testing the CBDC with commercial institutions and the public.Â
Also read: Central Bank âMoney Dropsâ With Digital Currencies Could Fuel Inflation: Bank of America
