Israel’s central bank is keeping an eye on developments that, according to the bank, could have an impact on the decision to issue a digital shekel (SHAKED), including the widespread use of stablecoins.
According to a report released on Monday by the Bank of Israel’s steering committee on the possible issuance of a digital shekel, the regulator has not decided whether to issue a central bank digital currency (CBDC).
Only a small fraction of the world’s central banks have started to issue CBDCs even though 90% of them are looking into them, as per the 21-page study outlining the scenarios.
The Bank for International Settlements (BIS) and the central banks of Sweden, Norway, and Israel previously worked together to finish an investigation into the potential applications of CBDCs for international retail and remittance payments.
A decision to issue CBDCs by the United States or the European Union is one scenario that might have an impact on the decision to issue a digital shekel. The central bank’s decision to issue one could also be influenced by a decrease in the use of cash, notably huge stablecoin adoption, competition in the local payment system, and major technology advancements in payment systems.
If the circumstances mentioned above support it, the Bank of Israel must be ready to hasten the issuing of a digital shekel, according to the announcement.
