Israel has been testing her digital money named Shekel.
In 2017, Israel started planning to issue a cryptocurrency to the population, but only recently the government have decided to rush the preparation to begin the issuance.
At a conference at the Fair Value Forum of IDC Herzliya, Bank of Israel Deputy Governor Andrew Abir had revealed this development.
However, Abir was not optimistic that such a central-bank digital currency (CBDC) would ever be available to the public.
In a statement Abir said,
“I had previously estimated that the chance of having a CBDC within five years is 20%. My estimate has increased a bit in the last year, mainly because other countries are advancing with it too. But still there is less than a 50% chance.”
Back in May 2021, the Bank of Israel said it was planning to launch a digital currency to the public. The decision to accelerate its research and preparation was in conjunction to the rapid developments in the digital economy and in payments.
A CBDC-issued currency would rely on a blockchain, but it would be different from the cryptocurrencies that are decentralized, like bitcoin or ethereum.
The most important difference is that a CBDC issued by a country’s central bank would be regulated only by that particualar state.
“The option for a CBDC is still being examined, and when we made our statement last month, it was not to say what we are doing, but rather to share what we do not know and receive feedback from the public,” Abir said.
In recent years, central banks from multiple world economies have begun exploring the possibility of issuing a CBDC alongside existing means of payment.
Furthermore Abir explained,
“We are in the middle of a process of disruptive technology, and we do not know who are going to be the winners. Will it be the banks, credit-card companies, fintech or big technology companies? There will be changes in the next few years that we do not yet know about. But it is clear that the environment in five years’ time will not be the same as the environment today.”
Abir revealed that banks will remain as is and will not go away and central banks will still have an important role in the payment system as a whole.
Bitcoin is a pyramid scam.
“Another thing that might disappoint you is that any digital currency of a central bank would not be designed as a kind of protection against bitcoin. What we are talking about is a payment system. Bitcoin is not a payment system, and it is not a currency. In the best situation, it is a financial asset, and in the worst case, it is a pyramid scam,” Abir said.
A Pyramid Scam? Can you believe that?
What do you say?