Israel is set to fast-track the creation of its own central bank digital currency (CBDC), known as the digital shekel. The Bank of Israel (BoI) intends to collaborate with various service providers to develop an advanced digital payments ecosystem centered around the digital shekel. The central bank’s announcement, known as Project Rosalind, is a joint initiative with the Bank for International Settlements (BIS) and the Bank of England. The project aims to create prototypes for an application programming interface (API). As part of the project, the BoI will offer a sandbox environment with API capabilities, allowing participants to compete in building real-time CBDC payment systems for the general public. The initiative has garnered attention from both the public and private sectors, as well as the academic community. While CBDCs are designed for universal use cases, participants in Israel’s CBDC experiment are also encouraged to develop solutions for specific niches and scenarios. The development of a digital shekel is expected to receive support from the public and could benefit the BOI by incentivizing banks to offer higher interest rates. However, concerns have been raised about potential privacy breaches associated with CBDCs.
Israel Commences Trial of Digital Shekel CBDC for Payment Transactions