The Bank of Israel has proposed a possible design for a digital currency of the Central Bank (CBDC) if the decision is made to introduce one in the future.
The central bank described the digital shekel (DS) proposed as a “versatile CBDC”, to know that it would be for retail and wholesale, in an article published on Tuesday.
“The DS will be a versatile digital currency that will meet the retail needs of end users such as households and businesses as well as the wholesale needs of financial entities,” said the newspaper.
The Israel Bank would therefore provide a digital equivalent to Cash while improving its existing settlement system that financial institutions already use, adding “intelligent” features, such as composability and programmability.
The central bank also stressed that no decision had been made to issue a CBDC. Consequently, the design presented by the article should only be considered as preliminary.
Central banks of almost all the economies developed around the world have at least explored the possibility of issuing a CBDC for several years.
Although their supporters argue that they are a tool for financial inclusion and a means of safeguarding fiduciary currencies against the drop in the use of cash, they are also criticized by those who consider them a Trojan horse to strengthen state control over the use of money.
