Israel's central bank is considering issuing digital shekels to boost the country's payment system。However, the decision to launch the financial instrument remains a topic of debate, echoing similar discussions in advanced economies around the world.。

Amir Yaron, governor of Israel's central bank, shared these insights at a recent digital currency conference, highlighting the progress the country has made in modernizing its financial system.。According to Reuters, since November 2021, the Bank of Israel has been actively studying and preparing for a possible digital shekel.。

payment modernization

The Bank of Israel has partnered with Hong Kong's central bank and the Bank for International Settlements on a project called Sela.。The initiative successfully demonstrated the viability of a retail CBDC, combining accessibility, competition and cybersecurity measures.。Israel to launch CBDC in 2017。

Governor Yaron noted that the rapid digitization of the economy makes developing a CBDC a logical step.。He stressed that if Israel decides to proceed, it will prioritize privacy issues in digital payments, which will offer a higher level of privacy protection than traditional digital means.。

In addition, the Israeli Ministry of Finance has taken a proactive approach to regulating decentralized autonomous organizations (DAOs).。Israel's finance ministry reportedly announced in July the formation of a cross-agency team tasked with developing DAO regulations.。

Global CBDC race heats up

Meanwhile, the race for global CBDC continues to heat up。Last month, Russia launched the digital ruble pilot project, which is scheduled to be launched on August 15.。The country's central bank is working with 13 banks and some customers to test the viability of digital currencies in real-world scenarios.。

Russia's move to digital currencies, particularly the digital ruble, is a strategic response to economic sanctions imposed by the United States and its Western allies following Russia's invasion of Ukraine.。The sanctions have disrupted traditional financial services, prompting Russia to explore other avenues to maintain its financial system.。

Elsewhere, the Bank of France is laying the groundwork for partnerships with private companies, launching a central bank digital currency (CBDC) for institutional and retail customers.。In July, the central bank issued a series of policy recommendations aimed at facilitating the domestic rollout of CBDCs.。The move is due to the fact that the French central bank has been actively engaged in wholesale CBDC-related experiments since 2020.。