Israeli Central Bank Advised Not to Issue 'Digital Shekels'

The bank’s experts claim that despite a number of benefits offered by the creation of a new digital currency, the main purpose of such a move is to maintain the public’s access to the central bank’s liability, and this particular issue "is not currently relevant to the Israeli economy."

A new study conducted by a team of experts appointed by the Bank of Israel has advised the organization to refrain from issuing its own digital currency, the so called "digital shekel."

"The team does not recommend that the Bank of Israel issue digital currency in the near future. We must continue to examine and monitor this field before we can form the proper foundation for a decision on whether to recommend digital currency," the report states.

The experts did admit that the issuance of digital currency offers a number of benefits, like "assistance with combating the unreported economy, adaptation with the advanced technological environment, and advancing the fintech sector in Israel."

However, they claim, the main purpose of issuing digital currency is to maintain the public’s access to the central bank’s liability, and this particular issue "is not currently relevant to the Israeli economy, since there is no significant reduction in the use of cash."

READ MORE: 'Digital Shekel': Israel Mulls Creation of Its Own National Cryptocurrency

Earlier in 2017, Israeli media revealed that the Bank of Israel and Ministry of Finance have been working on a state-backed digital currency, the so called "digital shekel".

The new digital currency, identical in value to a physical shekel, would record all transactions made by the user via his or her mobile phone, which in turn would make it more difficult for users to avoid paying taxes.