Israel Advances CBDC Plans; Reveals Preliminary Digital Shekel Design

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Israel Advances CBDC Plans; Reveals Preliminary Digital Shekel Design – Crypto News

Published

11 months ago

March 4, 2025

Dripp

As the United States explores a strategic crypto reserve, Israel is pushing ahead with its central bank digital currency (CBDC) plans. In a recent development, Israel released an initial design proposal for its official digital shekel (DS).

Though the country’s potential launch of the digital shekel remains uncertain, Israel’s recent move underscores the growing alignment of global CBDC projects around key issues like anonymity, architecture, and ecosystem roles.

Israel Introduces Preliminary CBDC Design: What You Should Know

Notably, the Bank of Israel has taken a significant step in its CBDC initiative despite uncertainty on its potential launch. On March 3, 2025, the Steering Committee of the Bank of Israel published a preliminary design for its central bank digital currency, digital shekel. The proposal outlines the project’s key components, including its supporting ecosystem, functional capabilities, technical architecture, regulatory framework, and future plans.

Israel believes that the CBDC could benefit public interests. In an official statement, the central bank highlighted,

The DS is expected to offer a wide range of benefits to all segments of the population. It will be available to the entire public, including children, foreigners, all types of businesses, public institutions, and financial entities.

Digital Shekel: Israel’s Potential Plans

Interestingly, the Bank of Israel envisions developing a CBDC with a dual purpose. The plan includes the digital shekel catering to both retail transactions for individuals and businesses, as well as wholesale transactions for financial institutions. Similar to other proposed CBDCs, the central bank will have the control over the issuance and system rules of the digital shekel. Meanwhile, private-sector Payment Service Providers (PSPs) will manage customer onboarding and frontend services.

In addition, Israel’s CBDC is poised to offer key features like offline functionality, interoperability with other payment systems and more. The bank stated, “The DS will be interoperable with other payment systems, allowing users to receive or pay in digital shekel even if the other party to the payment does not use the digital shekel.”

The Rise of CBDCs: Central Banks Worldwide Embrace Digital Currencies

Reportedly, nearly 134 countries and currency unions are exploring a centralized digital currency. The number has skyrocketed from just 35 in May 2020 to now represent 98% of global GDP.

Three countries- the Bahamas, Jamaica, and Nigeria- have fully launched their CBDCs. The BRICS nations, including Brazil, Russia, India, China, and South Africa, are currently testing their own CBDCs. Recently, the European Central Bank (ECB) released the inaugural progress card outlining the digital euro’s key features.

Crypto Reserve vs Digital Fiat: US and Israel’s Different Approaches

Israel’s CBDC update comes on the heels of the United States’ plans to adopt Bitcoin, XRP, SOL, and ADA for the national crypto reserve. This showcases the two countries’ diverse approaches to digital currencies.

Though the digital shekel’s potential launch teeters on the brink, the US’ crypto reserve strategy will soon be implemented. It needs to be seen how these distinct approaches influence the global financial landscape.