Bank of Israel considers to issue a digital Shekel

The Steering Committee of the Bank of Israel published a report on the public's attitudes towards a possible issuance of a "digital shekel", in which it notes the possible benefits of such a move and outlines a potential model. Can create a cheap and secure alternative to existing means of payment in the digital age and to cross-border payments in particular.
This is a completely different initiative from the virtual currencies currently known in the market, such as Bitcoin, Etherium and Dogecoin. For, Bitcoin and other similar currencies were created by private users in the network, using a technology known as blockchain, which allows secure transactions between merchants without the need for a bank or regulatory body. That is, even if some use of the same technology or technology similar to it, the very idea of ​​some central bank issuing and controlling the virtual currencies contradicts the original goal of eliminating the need for a central regulatory body.
In the background, many traders in Israel find it difficult to deposit and withdraw money from the bank in order to trade in virtual currencies currently on the market, mainly because the Bank of Israel has not yet finally settled the issue for banks, which fear breaches of money laundering and terrorist financing regulations.
According to the report, since 2017, the Bank of Israel has been examining the issue of digital currencies in the issuance of central banks (known as the CBDC), but in a report published in 2018, it was recommended not to issue digital currency in Israel at that time. Now, although a final decision has not yet been made on the issue, it seems that the issue is being re-examined. "The rapid developments in the digital economy and in the worlds of payments have led the Bank of Israel to accelerate research and preparations for a possible issuance of a digital shekel," the report said.
According to the Bank of Israel, a "digital shekel" can, as stated, yield various benefits to the Israeli economy, including creating an efficient, advanced, cheap and secure alternative to the means of payment that exist in the digital age. Another advantage of such a move, according to the report, is the functioning of the payment system in the event of an emergency or malfunction. For, if indeed issued, the digital currency will be built on a separate infrastructure, which will not depend or will depend only to existing payment systems. Continue to make payments even if one of your existing payment systems fails.
According to the bank, the currency will also have advantages of a certain privacy and anonymity, similar to that of cash. "The central bank's digital currency will be able to preserve in the digital dimension some of the characteristics of cash in the context of maintaining privacy and the right to prevent commercial use of the payer's or payee's information," it said.
On the other hand, the authors of the report are reluctant and claim that due to the fact that this is an innovative concept that does not currently exist in any developed country, there are still issues that require further research to enable issuance and use of the currency. Monetary policy; and the implications of the possibility that other banks will issue their own currencies and the widespread adoption of private currencies by the public.