The Bank of Israel has presented a possible design for a digital currency of the Central Bank (CBDC) in case the decision is made to introduce one in the future.
The Central Bank described the Shekel Digital (DS) proposed as a “multipurpose CBDC”, to know what would be for retail and wholesale use, in an article published on Tuesday.
“The DS will be a multipurpose digital currency that will address both the retail needs of end users, such as households and companies, as well as the wholesale needs of financial entities,” the document said.
Therefore, the Bank of Israel would provide a digital equivalent to cash while updating its existing liquidation system that financial institutions already use, adding “intelligent” functionality, such as composition and programming.
The Central Bank also emphasized that a decision to issue a CBDC has not been made. Therefore, the design presented by the document should only be considered preliminary.
The central banks of almost all economies developed worldwide have been exploring at least the possibility of issuing a CBDC for several years.
While their proponents argue that they are a tool for financial inclusion and a means of fiduciary currencies to the future proof against the decrease in cash use, they are also criticized by those who see them as a Trojan horse for reinforcing state control over the use of money.
