- Israel has already started testing its own CBDC.
- The country has chosen to use Ethereum blockchain for its smart contract function.
- The Bank of Israel also revealed that they began researching about CBDC since 2017.
The Bank of Israel recently announced that it has begun to trial its own central bank digital currency (CBDC). Interestingly, it will be using the Ethereum blockchain, possibly due to its smart contract functionality.
In fact, Israel is calling for smart contract proposals which could be implemented alongside its CBDC smart contract. Earlier, the bank asked experts regarding their thoughts on the creation of a CBDC.
The central bank also revealed that it has been exploring the concept of a digital shekel since 2017. Last month, the authorities concluded that the study has been successful, and that they will turn “this plan into action”.
Bank of Israel wrote,
“A digital shekel could generate various benefits for the Israeli economy, but issuing it also involves risks. The Bank of Israel is preparing an action plan so that if conditions develop in the future that lead to a Bank of Israel assessment that the benefits of issuing a digital shekel outweigh the costs and potential risks, the Bank of Israel will be prepared to put this plan into action.”
To be sure, Israel clarified that the CBDC will be different from cryptocurrencies although they both use blockchain technology.