Bank of Israel Ponders Digital Currency

The Bank of Israel is considering adopting a digital currency as a way to create a faster payments system and reduce the amount of cash in the economy, according to a recent report in Reuters, which cited an unnamed central bank source.

While no decision has been made yet, the source told Reuters that the government was ready to legislate or include the matter in its 2019 budget and economic package if the central bank provided its’ final approval.

Such a currency would presumably be safe, centralized and follow anti-money laundering laws, the source told Reuters, thus distinguishing it from a cryptocurrency like Bitcoin, which is decentralized.

“Central banks around the world are examining (the use of digital currencies) so we should as well,” the Israeli source told Reuters.

In Israel, the underground economy is estimated at nearly a quarter of national output, and the nation has been looking at ways to address the issue for years, Reuters said. The Bank of Israel last month asked for proposals to create an infrastructure to support immediate payments in the country, like ones that are used in Britain and Sweden.

– Nicholas Stern, managing editor

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