FX.co ★ Bank of Israel advocates for digital shekel

The Bank of Israel is highly enthusiastic about the potential of the digital shekel to transform the banking sector. According to Deputy Governor Andrew Abir, the central bank digital currency is designed not only to balance innovation with tradition but also to spark a competitive spirit among commercial banks. Abir suggests that this new financial instrument could make the banking scene more dynamic. With the Bank of Israel recently raising interest rates to combat inflation, there is a growing perception that slow growth in deposit rates might lead to exciting new financial adventures. And here comes the digital shekel, waving the banner of central bank authorization. This idea is being discussed not just as a theoretical concept but as a practical financial tool capable of paying interest and appealing to those weary of the volatile swings of private cryptocurrencies. Abir adds to the discussion by emphasizing the reliability of the digital currency, "The digital shekel will not be developed by some anonymous Satoshi Nakamoto. Everyone will know who is behind the digital shekel and who is responsible for it - it will be the central bank, the same Bank of Israel that stands behind the cash we all know and trust." Indeed, in a world of financial uncertainties, a stable currency backed by the central bank offers a secure alternative to the unpredictable nature of stock market investments. While transforming the traditional shekel into a digital currency might seem like merely rearranging the furniture, Abir is confident that this step will make conventional money more accessible and engaging. For banks, it means adapting to a more competitive environment where they may need to offer better returns due to heightened competition.