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Bank of Israel Releases Preliminary Design for the Digital Shekel: A Deep Dive
- Israel has released the preliminary design for its CBDC, the digital shekel, focusing on an inclusive and user-friendly digital currency.
- The digital shekel will support offline transactions to address network connectivity challenges in certain areas.
- A decision on the launch of the digital shekel will be made after 2026, based on public feedback and further research.
- The Bank of Israel aims to update its financial system with the Digital Shekel, aligning with global CBDC trends for enhanced payment networks.
- Motivations behind implementing the Digital Shekel include building new payment infrastructure, improving privacy, and combatting illicit financial activities.
- The Digital Shekel design prioritizes inclusivity, ensuring access for all segments of the population, including children, tourists, and businesses.
- Key features of the Digital Shekel design include offline functionality, interoperability with existing systems, and immediate payment settling.
- Israel's two-tier model involves the central bank issuing the digital shekel while private sector entities handle user onboarding and customer services.
- The Bank of Israel plans a cautious approach toward the Digital Shekel, aiming to decide on its launch post-2026 after thorough research and public engagement.
- The system prioritizes user privacy with no central database for identifiable information, while also emphasizing data security and compliance with regulations.
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