Deputy Governor Andrew Abir disclosed that Israel is closely watching the European Central Bank’s (ECB) next move, which could influence the global adoption of Central Bank Digital Currencies (CBDCs).
Abir underscored that Israel’s stance hinges significantly on Western central banks’ actions, particularly the ECB, anticipated to lead in this domain. He emphasized that countries like Israel closely monitor the ECB’s advancements on the digital Euro before advancing their CBDC initiatives.
Addressing public adoption challenges, Abir recognized the critical shift from theoretical to practical use cases. He emphasized establishing robust applications before launching a CBDC to ensure widespread acceptance.
In May 2024, about 134 countries reportedly showed interest in CBDCs. Last year, the European Union introduced CBDC-related legislation, clarifying it as preparatory rather than definitive.
Recently, the Bank of Israel launched the “Digital Shekel Challenge” to explore the adoption of CBDC. This initiative invited applications across sectors to test the digital currency’s core system and API layer, laying the groundwork for future CBDC integration in payment systems.
Abir highlighted CBDC’s potential to foster fair competition among payment providers by offering equal opportunities compared to traditional systems, with reduced capital requirements and regulatory oversight.
