Israel’s central bank is closely monitoring the adoption of stablecoins and other scenarios that could influence its decision to issue a digital shekel (SHAKED), according to a recent report.
While the Bank of Israel’s steering committee has not yet made a decision on issuing a central bank digital currency (CBDC), it is one of the many central banks around the world that are exploring the potential benefits of CBDCs.
In a 21-page report, the Bank of Israel outlined various scenarios that could sway its decision to issue a digital shekel.
These include a decline in the use of cash, the widespread adoption of stablecoins, competition in the domestic payment system, and significant technological developments in payment systems.
The report also notes that a decision by the U.S. or the European Union to issue a CBDC could influence the Bank of Israel’s decision.
The Bank of Israel has emphasized the importance of being prepared to issue a digital shekel if the circumstances support it. This sentiment is echoed by many central banks around the world, as they explore the potential benefits and challenges of CBDCs.
Earlier this year, the central banks of Israel, Norway, and Sweden collaborated with the Bank for International Settlements (BIS) to explore the potential use of CBDCs for international retail and remittance payments. This collaboration underscores the growing interest and importance of CBDCs in the global financial landscape.