The Bank of Israel is preparing an action plan for the potential issuance of a digital shekel, but a decision has not yet been made. The bank outlines the conditions that would enable or support a decision to issue a Bank of Israel digital currency and identifies variables that may affect the Steering Committee’s recommendation.
Facts
- The Bank of Israel is preparing an action plan for the potential issuance of a digital shekel, called SHAKED.
- Technological developments in the payments system could justify the issuance of a digital shekel as an efficient and secure platform for advanced use cases.
- Continued concentration in some segments of the domestic payments system may justify the issuance of a central bank digital currency to support competition.
- CBDC issuances by other countries, such as the US or the EU, would be an important factor in the decision to issue a digital shekel.
- A decline in the legitimate use of cash and its acceptance in transactions may decrease the public’s ability to use central bank money, which is important in maintaining trust in other means of payment and in minimizing the intervention of private entities.
- Significant penetration of stablecoins or other private means of payment that would be broadly used might impair the payment system.
- The Bank of Israel must monitor developments in the aforementioned aspects periodically to be prepared to advance the issuance of a digital shekel if the variables support it.
