Bank of Israel asks public opinion for CBDC, gets a positive response

The Bank of Israel summarised the results of the public comment on its central bank digital currency (CBDC) proposals on Monday
The Bank of Israel summarised the results of the public comment on its central bank digital currency (CBDC) proposals on Monday

The Bank of Israel summarised the results of the public comment on its central bank digital currency (CBDC) proposals on Monday, according to a report by Reuters. It received 33 answers from various sectors, half of which came from outside the country and 17 from the domestic fintech community. 

Even though Israel’s central bank has yet to make a final decision on the launch of the “digital shekel,” the public response to the concept has been primarily positive.

“All of the responses to the public consultation indicate support for continued research regarding the various implications on the payments market, financial and monetary stability, legal and technological issues, and more,” it said, adding that the final decision on the project is still in the hands of regulators.

While the public reportedly believes that the digital shekel will promote competition in the payments business, the privacy issue has resurfaced as a point of contention. Some critics want that the future currency to be completely anonymous, while others argue that anonymity is unrealistic in the fight against money laundering and the illicit market. 

The Bank of Israel aims to accelerate CBDC research

The Bank of Israel intends to keep doing research and maintain a “fruitful dialogue with all interested parties at all stages of research and development.”

Notably, the central bank first considered the CBDC initiative at the end of 2017. The research team advised that the initiative be put on hold for the time being. However, the Bank of Israel reintroduced the proposal in May 2021. It announced in November 2021 that it would speed up research. It affirmed in March 2022 that the eventual deployment of the digital shekel would not pose a threat to the national banking system.

In November last year, the country passed a new AML law for crypto. Moreover, in March this year, the Bank of Israel proposed guidelines to regulate crypto to prevent AML and CFT in the nation.