The Bank of Israel planning to issue its central bank digital currency (CBDC) digital shekel, the Israel central bank said on Monday. The central bank has shared potential reasons supporting the decision to issue a digital currency in the future.
According to a press release on April 17, the Bank of Israel Steering Committee on the Potential Issuance of a Digital Shekel outlined the plan to issue a digital shekel “SHAKED.” While the decision has not been finalized yet, the central bank revealed potential reasons behind the issuance of a CBDC.
The Bank of Israel shared factors that would support a decision to issue a CBDC in the future. It includes CBDC issuances by other countries such as the U.S. and the European Union, declining cash transactions in Israel, stablecoin adoption, competition in the domestic payment system, and technological developments in payments.
Recently, the central banks of Israel, Sweden, and Norway have been exploring the potential of retail central bank digital currencies (CBDCs) in the “Icebreaker” project led by the Bank for International Settlements (BIS) Innovation Hub. The Bank of Israel earlier worked with the Hong Kong Monetary Authority on a trial to test a new digital currency issuance in the country.