Bank of Israel Begins Testing CBDC – Digital Shekel

Andrew Abir, the Deputy Governor (DG) of the Bank of Israel, is now issuing digital shekels to kick off an internal pilot program. The Jerusalem Post reports that the Deputy Governor made the announcement at a conference of the Fair Value Forum of IDC Herzliya. Although the announcement was surprising to those in attendance, the report implied that Abir accidentally revealed the information when explaining the need for a digital shekel.

The DG explained that he was initially not 100% in support of a digital shekel at first. He said:

 “I had previously estimated that the chance of having a CBDC within five years is 20%.” 

However, he is now more hopeful about the plan as his estimate has gone up since the previous year. Despite his optimism, he states, “still there is less than a 50% chance.”

Apart from Israel, Cambodia and The Bahamas are the only countries that have kicked off digital currencies backed by their central banks. Many countries, including France and Sweden, are also testing or planning to launch their digital currencies. While Sweden has completed trials of its e-Krona, France announced that it was testing its digital currency.

Meanwhile, the creation of a digital currency is lagging in the United States. Chris Giancarlo, the former Chairman of the Commodities Futures Trading Commission, spoke about the digital currency and its impact earlier this week. He said:

“.[…] our new mission is to make sure central banks wake up to this, and the US Fed wakes up to this, that these social values that got us here, the rule of law, a free capital markets, free enterprise, zones of individual economic privacy, are ingrained in a new digital future of the US dollar, and that we don’t allow ourselves to be taken in by what China’s doing and match that state surveillance approach.”

Chris Giancarlo is also a member of the Digital Dollar Foundation that helps the US compete regarding digital currency.

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