Bank of Israel Launches Sandbox Environment for Testing Digital Shekel Use Cases
The Bank of Israel is making significant strides towards the development of a digital shekel, as it prepares to launch a sandbox environment for testing CBDC use cases. This initiative aims to refine the design of the digital currency and ensure its capacity to facilitate advanced applications.
Andrew Abir, the central bank’s deputy governor, announced the upcoming project, stating, “We are now building the system and intend to officially announce the project in the coming weeks.” The sandbox will provide a controlled environment for the evaluation of novel digital technologies, allowing financial institutions, fintech enterprises, and other stakeholders to experiment with innovative applications for the digital shekel.
Abir emphasized the stability of the digital shekel compared to the volatility of cryptocurrencies. He described the digital shekel as a liability of the Bank of Israel to the public, similar to physical cash, with the central bank standing behind its value. This distinction from cryptocurrencies ensures that the digital shekel will maintain a stable value, always equivalent to one cash shekel.
The Bank of Israel’s plan for the digital shekel includes a two-tiered operational model that will enable a wide range of entities to participate as Payment Service Providers or Additional Services Providers within the platform. This inclusive approach aims to make the digital shekel accessible not only to traditional banks but also to payment companies, fintech firms, consumer clubs, and other participants.
Overall, the launch of the sandbox environment for testing CBDC use cases marks a significant step towards the implementation of the digital shekel in Israel, offering a secure and stable digital currency for various transactions and applications. Stay tuned for more updates on this innovative project.
