Bank

Satoshi

While the impact of central bank digital currency (CBDC) on commercial banks has often been seen as a source of concern, Bank of Israel deputy governor Andrew Abir took a contrarian view in a speech <a href="https://www.boi.org.il/en/communication-and-publications/press-releases/16-4-2024en" target="_blank" rel="noopener noreferrer nofollow">published</a> on the central bank’s website. Let the banks scramble to compete, he said, in essence.
Years of effort to increase competition in the Israeli banking sector have paid off in a variety of ways, but “we still have a long way to go,” Abir said. As the Bank of Israel raised interest rates to combat inflation, banks raised interest rates on credit, but the rise in deposit rates was “partial and slow.” He added:
<blockquote>
 “In many countries around the world, including Israel, commercial banks do not win public popularity contests. […] In Israel, some of the anger directed at the banking system is the result of the need to increase the level of competition in some of the segments.”
</blockquote>
The design of the digital shekel <a href="https://cointelegraph.com/news/israel-announces-plans-interest-bearing-shekel-cbdc" rel="noopener noreferrer nofollow">includes an option to pay interest</a> on it. Abir confidently declared that the digital shekel, which is still in its planning stages, would enjoy public support:
<blockquote>
 “The digital shekel will not be developed by some anonymous Satoshi Nakamoto. Everyone will know who is behind the digital shekel and who is responsible for it — […] the same Bank of Israel that stands behind the cash we all know and trust.”
</blockquote>
The introduction of a digital shekel would benefit the Bank of Israel as well, by making central bank money more readily available, for instance for use in digital payments, reversing the downward trend in central bank money use brought on by technological breakthroughs in the private sector, Abir said.
Related: <a href="https://cointelegraph.com/news/israel-s-central-bank-says-cbdc-could-be-issued-if-stablecoin-use-increases" rel="noopener noreferrer nofollow">Israel’s central bank says CBDC could be issued if stablecoin use increases</a>
Just the option to hold digital shekels could incentivize banks to pay higher interest, Abir said. Thus the digital shekel would give the central bank a mechanism to influence the degree of transmission of central bank interest rates.
<figure><img src="https://s3.cointelegraph.com/uploads/2024-04/b6b7faaf-0ed7-43dd-ad15-84539930b98d.png">
</figure>
The digital shekel reportedly <a href="https://cointelegraph.com/news/bank-of-israel-claims-public-support-for-its-cbdc-project" rel="noopener noreferrer nofollow">has strong support</a> among the Israeli public.
Magazine: <a href="https://cointelegraph.com/magazine/how-terror-israel-gaza-war-being-weaponized-destroy-crypto/" rel="noopener noreferrer nofollow">Terrorism and Israel-Gaza war weaponized to destroy crypto</a>

Israeli central bank official says CBDC competition with banks is good for economy

Cointelegraph

Altri articoli pubblicati su 16 apr 2024

New Discovery Crypto Koala Coin (KLC), Cardano (ADA) and Avalanche (AVAX) Gain Boost From Market ...

‘Bitcoin will reach over $1M’ — Animoca founder at WebSummit Rio

300 Million Dogecoin Snatched by Mysterious Whale After Elon Musk’s Tweet

Dogecoin Insider Notes: DOGE Prices Falls As New DOGE-Like Cryptocurrency Prepares For Launch

Bitcoin Price Analysis: BTC Price May Experience a Halving Crash, Causing a Drop of Over 20%

Ankr and Brevis coChain partner to enhance web3 networks with ZK

Iscriviti alla nostra newsletter gratuita per aggiornamenti giornalieri sulle criptovalute!