Bank of Israel, the Israeli Central Bank today announced they would use Ethereum blockchain technology for its CBDC pilot program, as reported by Bloomberg. The first trial for digital Shekel will be an internal pilot run as per the country’s financial daily Globes.
The deputy governor of the Israeli central bank Andrew Abir said that the digital shekel will pose no risk to the banking system and the only focus would be on making the payment system more robust. He explained,
“This is not going to eliminate the banks, no central bank would bring in a digital currency with such an aim. The banks are still an important part of any payments system that there will be. What we are talking about is a payments system.”
Abir said that Israel’s payment system is still years behind its European counterparts and CBDC could potentially change it. However, he also stressed that a working CBDC could take at least 5 more years to become a reality.
Countries Around the Globe Accelerate CBDC Program
Central Bank Issued Digital Currency has become the top priority of many developed nations around the globe especially looking at the progress of China in the field. China’s digital yuan is complete and currently under widespread trials across multiple provinces while a majority of other nations are still in the development phase. A couple of weeks before France and Switzerland started a combined cross-border trial for their respective CBDCs, while the Russian government has also announced it would start the trials from next year.
Ethereum has also become a growing choice for many institutions and countries owing to its ease of deployment and the freedom of customization. Recently, JP Morgan started its blockchain built on top of Ethereum as well.