Bank of Israel Unveils Preliminary Design for Digital Shekel

The Bank of Israel has released a preliminary design for the digital shekel, a central bank digital currency (CBDC) aimed at providing a universal means of payment for the entire public.

According to the Bank’s report, the digital shekel is designed to be accessible to all, including children, foreigners, businesses, public institutions, and financial entities. “Similar to cash, it will be a universal means of payment – anyone will be able to pay anyone, and anyone will be able to receive payment from anyone, but with the convenience and advancement of a digital means of payment.”

Key Features of the Digital Shekel

The digital shekel boasts several key features, including:

  • Fast payments with support for offline transactions
  • Lower costs for businesses compared to existing payment options
  • Higher level of privacy compared to existing digital payments, with the possibility of anonymous payments in limited amounts
  • Integration with other systems, enabling users to make or receive payments in the digital shekel even if the other party does not use it

Implementation and Future Plans

The implementation of the digital shekel will depend on collaboration with lawmakers and industry stakeholders. The Bank of Israel has emphasized that a final decision on issuing the digital shekel has not been made yet, and will only proceed if future conditions show that the benefits outweigh the costs and risks.

The Bank of Israel first started exploring the possibility of a digital shekel in 2017, researching global trends in digital currencies and their potential impact on monetary policy and financial stability. In 2021, a special team was formed to develop the digital shekel further.

“The level of privacy in the digital shekel will be higher compared to existing digital payments, and similar to cash, it will also offer the possibility of anonymous payments in limited amounts.”

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