Bank of Israel Recommends Against Digital Currency

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The Bank of Israel has recommended against issuing a Central Bank Digital Currency (CBDC) after a study. The study findings and recommendations come after extensive efforts by the national regulator to study cryptocurrencies and DLT.

The study was performed by a joint team set up by the governor of the Bank of Israel to examine the issue of CBDCs. It has only recently completed its report and submitted it to the bank.

According to the report: “The team does not recommend that the Bank of Israel issue digital currency in the near future. It is necessary to continue examining the field and to follow developments around the world before there are proper grounds for a decision to recommend issuing digital currency.”

The opinion comes as little surprise, given that CBDCs are being widely discredited around the world by financial watchdogs and central banks because of their perceived incompatibility with the fiat cash-based system.

Bank of Japan also raised doubts about the operation of CBDCs and their potential place in the current system. The European Union also announced earlier this year that the conditions were not suitable for CBDCs in the environment the continuing popularity of hard cash and lack of serious risk assessment.

While other banks like People’s Bank of China (PBoC) and Venezuelan Central Bank are seen as in favor of CBDCs, no major country except Venezuela has announced the development of a CBDC. Canadian and Swedish Central Banks are also reportedly looking into the technology with interest.

 

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