The Bank of Israel and the Finance Ministry have been investigating the possibility of launching a state-sponsored fiat cryptocurrency (Digital Shekel) for several months, Jerusalem Post reported.
The fiat cryptocurrency would be called the digital shekel and would use a ledger to record every transaction by mobile phone and make it more difficult to evade taxation, according to a finance official who spoke to The Jerusalem Post.
“For several months now, regulators have been examining the possibility of a state-sponsored currency, and the government could review a tentative legal framework in January. The digital shekel would be identical in value to the physical shekel currently in use,” the Jerusalem Post wrote.
When asked where the digital currency would be stored, the official responded that the digital shekel would be able to be stored in offline and mobile wallets.
“You can imagine that instead of giving you a piece of paper saying the Bank of Israel on it, I can send you a piece of digital code that was issued by a central bank,” the official said to the publication.
The planning for the creation of the digital shekel is in its early stages. However, the government has offered the ‘Economic Arrangements Bill,’ which, if passed would create a separate panel for the Bank of Israel to consider creating the digital shekel.
The addition of the physical cash laws is the result of a failure by the Knesset to pass legislation of the same ilk two years ago. The pressure for digital currency adoption is high, as recent comments in the video below from Israeli Prime Minister Benjamin Netanyahu indicate.
This comes amid an announcement by the Tel Aviv Stock Exchange that it will blacklist bitcoin-related companies from being traded or listed publicly, Jerusalem Post reported.
“We will not allow companies whose values are based on bitcoin values, such as Natural Resource Holdings, to be included in TASE indices,” head of the Israel Securities Authority Shmuel Hauser told the publication. “We will also consider not to allow trading in ‘backdoor’ ‘costumes’ of bitcoins or alike.”
Israel follows in the footsteps of Russia, India, China and Venezuela who have all expressed the desire to introduce a digital currency for their respective countries.
IMF head Christine Lagarde has consistently stated that central bankers should be wary of cryptocurrency. She even went as far as to say that the IMF may consider adding digital currency to its SDR basket in the future.
Even analysts at Deutsche Bank have admitted that fiat currencies are failing and cryptocurrencies may soon replace them. Meanwhile, six major banks have partnered to create a digital currency to move fiat internationally.
We are shifting towards a blockchain-based economy where your entire life will be tokenized; like it or not that’s the future, a cashless society.
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