Israel’s central bank says CBDC could be issued if stablecoin use increases
The Bank of Israel says it's preparing an action plan for the potential issuance of a central bank digital currency (CBDC),though a formal decision has yet to be made.
On April 17, the Bank of Israel Steering Committee on the Potential Issuance of a Digital Shekel outlined possible scenarios for the development and deployment of a CBDC, a digital shekel called “SHAKED.”
It provided several scenarios that could lead to the issuance of a digital shekel, among them was increased stablecoin activity.
Increased adoption of stablecoins may “impair the payment system” it noted,before adding that stablecoins not pegged to the shekel “might also harm the monetary transmission.”
Another potential driver of CBDC development is a decline in the use of cash in Israel the Committee noted. It said cash is still used in a significant portion of consumer transactions in the country but a change in the public’s payment habits may result in a shift away from using central bank fiat.
The Bank of Israel does not want this scenario or private entities controlling payments so a CBDC could be the solution.
The Bank of Israel have released a document that outlines the conditions that would enable or support a decision to issue a digital Shekel https://t.co/ALU4FEYUTh...#Israel #Shekel #CBDC #DigitalCurrency #DigitalMoney #DigitalPayments #CBDCs #DigitalCurrencies #DigitalShekel pic.twitter.com/Jbe49i1VnR
It also said that consideration for the issuance of a CBDC would be made to “support competition in the payments system and in the financial system in the digital era.”
If the United States or the European Union issues a CBDC, then this would also influence Israel’s decision to deploy one, it stated.
The Bank of Israel Steering Committee concluded that
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