The usage of cash is decreasing as a result of advances in digital payment technology, according to Andrew Abir, Deputy Governor of the Bank of Israel, who spoke at the recent "Engines of the Israeli Ecosystem" conference on April 16.
He pointed out that in the digital age, currency has lost popularity as the main form of payment.
Abir presented the digital shekel, a prospective digital currency for central banks (CBDC), as part of a new sandbox project.
Financial institutions and IT businesses will be able to create and test applications for this virtual money with this platform.
He underlined that by facilitating transactions that are more compatible with digital and e-commerce platforms than traditional cash, CBDCs could resurrect competition within the financial sector.
In particular, the digital shekel might offer a framework for competition and innovation among different financial services.
The Bank of Israel has not committed to formally introducing the digital shekel, but it is use the sandbox to investigate its viability.
Evaluations of prospective hazards and advantages in the future will determine whether to proceed or not.
The bank had previously worked on initiatives like "Project Sela" and "Project Icebreaker," which investigated the usefulness and technical elements of CBDCs in local and global settings, respectively.
In conclusion, even though the digital shekel promises to bring Israel's financial services up to date, its success will depend on how well it is tested and how carefully its wider effects are taken into account.
April 2024, Cryptoniteuae