Central Bank of Israel will not issue its own digital currency for now

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Central Bank of Israel will not issue its own digital currency for now
bank of israel 248.88. (photo credit: Ariel Jerozolimski)

An Israeli research group studying digital currencies recommends that the country’s central bank refrain from issuing its own token, according to a November 6 press release.

An inter-ministerial research group, created in November 2017 by the Governor of the Bank of Israel (BOI) to “explore the issue of digital currencies of the central bank [CBDC]”, released its report this week.

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It says:

Central banks around the world are examining the possibility of issuing digital currency and/or using distributed technologies in the payment systems, but no advanced economy has yet issued digital currency for broad use. The Bank of Israel has also established a team to study the issue.

The team does not recommend that the Bank of Israel issue digital currency in the near future.  It is necessary to continue examining the field and to follow developments around the world before there are proper grounds for a decision to recommend issuing digital currency.

The results of the study were a surprise for the banking sector for not only Israel but also for the EU. In its September statement, the European Central Bank (ECB) pointed to the popularity of cash and the lack of risks of using them as key factors underlying the decision to withdraw from CBDC.