The Bank of Israel is seeking feedback on a newly-published high-level design for a potential digital shekel (DS). This initiative has been in exploration since 2017, and while a decision regarding its rollout has not yet been made, the publication of the design is viewed as a significant milestone.
The proposed digital shekel aims to be a multipurpose currency for both retail and wholesale use, accessible to the entire public, including children, tourists, businesses, public institutions, and financial entities. Similar to cash, the DS would serve as a universal means of payment, allowing anyone to pay or receive payments from anyone else. All transactions would be immediate and final, and the design also includes support for offline payments.
According to the central bank, the CBDC would be free for private users and more cost-effective than existing digital payment options for businesses. The private sector could leverage it to develop their own advanced payment solutions, utilizing the secure infrastructure of the Bank of Israel while fostering a competitive and open environment that avoids the establishment of “walled gardens.”
Moreover, the digital shekel is designed to maintain interoperability with other payment systems, enabling transactions even when one party uses the digital shekel and the other uses a traditional bank account.
Yoav Soffer, the digital shekel project manager, stated, “The Bank of Israel has not yet decided whether to issue a digital shekel, but it is important for us to prepare and deepen the knowledge and understanding together with the ecosystem regarding each of the possible components of the digital shekel system.”