Based on the framework of Ethereum, Israel has begun development of its own digital shekel.
The Bank of Israel has trialled a central bank digital currency (CBDC) and has taken a firm step towards the future of a cashless society and complete elimination of the need for traditional banking with a digital currency.
Israel’s Deputy Governor, Andrew Abir, confirmed that a CBDC was in the works and that testing had taken place, but also admitted the pilot program has been met with some challenges.
“I had previously estimated that the chance of having a CBDC within five years is 20%,” Abir said.
“My estimate has increased a bit in the last year, mainly because other countries are advancing with it too. But still, there is less than a 50% chance.”
One of the biggest challenges faced by the Bank of Israel and its intention to create a digital shekel is ensuring that the people will use it.
Israel citizens concerned over privacy
Still, citizens are still not that keen to completely recall physical cash and make the transition to the digital shekel.
They argue that, while the cash is largely anonymous, with the digital shekel, everything will be traceable and monitored by the government.
CBDC Project Manager at the Bank of Israel, Yoav Soffer said the CBDC initiative was ‘challenging’.
Soffer noted it simply wasn’t possible to put a due date on these things because “in general, projects at the Bank of Israel have start and finish dates”.
“You know when they will end and what you need to achieve along the way,” he said.
“We don’t know when this project will end, with all that that implies.”
Israel isn’t the only country that is aiming to create a digitised version of its national currency but its government did recommend developing a national crypto trading platform.
Nigeria was the first African country to join the ranks of its CBDC peers back in October. China, Japan, France, and Sweden have also been working on bringing about a digital currency, some as far back as 2017.
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