The use of stablecoins in Israel is on the rise, leading the country’s central bank to consider issuing its own digital shekel. The Bank of Israel has published a report detailing the possible outcomes that would warrant such a move, including the decline in cash use and global CBDC adoption. Stablecoins provide many advantages over traditional payment methods, such as speed and low cost. However, issues surrounding financial stability, cybersecurity and privacy must still be addressed. Israel is collaborating with Norway and Sweden to explore the potential of stablecoins for cross-border transactions, while also following the US in treating cryptocurrency assets like stocks and bonds. The success of CBDCs in other countries will play a role in Israel’s decision-making process, with the central bank previously testing a private-by-design CBDC blockchain technology and taking part in Project Icebreaker to study CBDC utility for international money transfers.
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