The Bank of Israel recently released a preview of what their potential digital currency, or what they’ve dubbed the digital shekel, would be. They haven’t officially decided yet that they’re going to do it, but this gives us a sense of how it would work and what it would be able to do.
The digital shekel and other types of money in the economy. Source: Bank of Israel
How the Digital Shekel Will Function
The digital shekel will be issued only by the Bank of Israel, meaning it will remain stable and secure as a digital currency. However, private companies will assist in a big way with acquiring users, converting deposits, and providing financial services. The CBDC must be usable online and offline, meaning you can use it even in areas with poor internet.
The digital shekel will also be compatible with current payment systems and digital assets, such that users can make payments whether the recipient has the currency or not. It will also facilitate instant payments, cutting down on waiting times for payments and transfers.
🇮🇱🏦 O Banco de Israel divulgou um plano preliminar para o shekel digital (#CBDC), detalhando seu ecossistema e funcionalidade. O diagrama ilustra como o shekel digital se integra ao dinheiro do banco central, dinheiro em espécie e dinheiro acessível ao público, incluindo… pic.twitter.com/gAl2GjNAjx
— Bitcoin, Criptomoedas & As Principais Notícias (@diogo_bitcoin) March 4, 2025
Advantages and Objectives
The Bank of Israel has pointed out several factors for a digital shekel to be considered. These are:
- Enhancing payment options by offering individuals a choice outside of mainstream banks.
- Lowering firms’ and consumers’ transaction costs.
- Improving financial transparency so to help, fight tax evasion and money laundering.
- Making sure that people can make payments online, whether they have a bank account or not.
Public Comment and Next Steps
In further fine-tuning the digital shekel design, the Bank of Israel issued a Digital Shekel Challenge, calling on businesses and tech companies to suggest practical use cases. The central bank also asks for public comment until April 30, 2025, to make sure that the currency would be suitable for both consumers and businesses.
The final positive sign for the actual launch of the digital shekel will be given after 2026, depending on further research, public attitudes, and regulations. If adopted, the digital shekel will radically change the country’s economic landscape by providing a secure, cutting-edge, and effective digital payment system.
