Bank of Israel Has Gained Support, Although It Remains Skeptical of the Digital Shekel

The Bank of Israel has continued to investigate the possibility of establishing a CBDC.

In November of last year, the Bank increased its research and development efforts.

Despite widespread support for establishing a CBDC, the Bank has yet to make any final decisions.

Over the previous year, as global economies have shown increased interest in CBDCs, Israel's Central Bank has received encouraging feedback from residents. The financial institution's stance on issuing one, however, remains uncertain.

Perhaps CBDCs to The Rescue?

Israel's Central Bank said on Monday that it has received popular backing for its plans to establish a digital shekel. Citizens feel that creating a central bank digital currency (CBDC) will benefit the economy by boosting payments system innovation, lowering the quantity of cash in circulation, and strengthening the fintech industry.

In November of last year, the Bank expanded its research and preparation activities in anticipation of the probable release of a digital shekel. After pondering launching a central bank digital currency in late 2017, it pushed its research to establish a more efficient payments system.

Furthermore, financial institutions said in March that a digital shekel would not materially degrade the banking system's commercial performance. Finally, the Bank urged the public to assess the benefits and drawbacks of establishing a CBDC.

The Bank of Israel said on May 10 that it had received 33 submissions from different industries, half of which were from overseas, and roughly 17 from the fintech industry.

The Bank of Israel Is Still Suspicious

Israeli citizens feel that a CBDC might help the economy thrive by fostering payment system innovation and lowering the quantity of cash in circulation.