Launch of a digital shekel pilot project in Israel
Date: 2024-05-29 Author: Henry Casey Categories: IN WORLD
The Bank of Israel (BOI) has announced the launch of an experiment with a central bank digital currency (CBDC), known as the digital shekel. The move is aimed at accelerating the development and implementation of a new digital currency in the country.
Inspiration from the Rosalind project
The basis for the digital shekel pilot project was the successful implementation of the Rosalind project. This project, developed jointly by the Bank for International Settlements (BIS) and the Bank of England, aims to create application programming interface prototypes for CBDCs. Inspired by these achievements, the Bank of Israel decided to adapt best practices for its initiative.
Attracting service providers
As part of the new project, the Bank of Israel plans to engage various service providers to develop an advanced digital payments ecosystem. The plan is to create a sandbox where participants will compete to create real-time CBDC payment systems. This approach will allow the integration of advanced technologies and ensure efficient testing of various solutions.
Pilot project details
Managing partner of Masterkey Venture Capital Shauli Reivan, in an interview with Cointelegraph reporters, revealed some details of the pilot. The program consists of three stages: submission of applications and presentations, access to the new network for selected projects and a final presentation to the judges. These steps will ensure that the best proposals are carefully selected and tested.
Bridging the gap between Web3 and government
According to experts, the initiative to launch a digital shekel could bridge the gap between Web3 technologies and government regulation. BOI Deputy Chairman Andrew Abir has previously said that CBDC competition with traditional banks could be good for the country's economy. He emphasized that the digital shekel will be developed with open and transparent governance mechanisms, which distinguishes it from cryptocurrencies created by anonymous developers.
Future plans
Back in March 2024, Israel announced its intention to issue a digital shekel. At that time, a two-tier model with support for instant payments and offline use was discussed. Now, with the launch of the pilot project, the country is taking a significant step forward towards realizing this ambitious goal.
The digital shekel promises to become an important element of Israel's financial system, offering new opportunities and benefits for both users and the country's economy as a whole.
