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Israel’s Central Bank Disapproves National Digital Asset

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According to a press release, an Israeli study group who was doing research on digital currency options, has recommended that the country’s central bank should not issue its own token.

The study group was formed in November last year, by the governor of the Bank of Israel to examine the issue of central bank digital currencies. The interdepartmental group has revealed the results in a full report.

An excerpt from the report reads:

“Central banks around the world are examining the possibility of issuing digital currency and/or using distributed technologies in the payment systems, but no advanced economy has yet issued digital currency for broad use,”

It also adds that “The team does not recommend that the Bank of Israel issue digital currency in the near future. It is necessary to continue examining the field and to follow developments around the world before there are proper grounds for a decision to recommend issuing digital currency.”

This result is not a big surprise for the banking sector since other jurisdictions have made similar decisions this year saying it was not conducive to launch a central bank digital asset.

The Europen Central Bank highlighted the continuing popularity of cash and a lack of full risk assessment as key factors behind its decision.

However, it is known that the People’s Bank of China, the Bank of Canada and Sweden’s central bank have been actively looking into the technology.

The report also indicates that the introduction of a central bank digital asset brings its own litany of risks and difficulties which may have a potentially large impact on the Israeli financial system, the Bank of Israel and the country’s payments system. Until these risks are fully understood, says the report, the research team will continue to study the potential impact of a central bank digital asset.

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