The Bank of Israel is testing a national digital currency based on Ethereum, according to a report by Bloomberg.
This is part of a larger trend of central banks exploring the use of blockchain technology for issuing digital currencies. The People’s Bank of China is also reportedly working on a similar project.
The Israeli central bank has been studying the feasibility of a digital currency for some time now. However, it remains to be seen if and when such a currency will be launched.
The Ethereum technology is one of the best known in the cryptocurrency market, mainly for its pioneering spirit with the so-called smart contracts. By allowing the programming of money, the network has implemented in recent years several innovations in world finance.
- Institutional investors take advantage of the Bitcoin price correction to accumulate the asset
- Ethereum, the second most valuable cryptocurrency in the world, loses 50% of its value in a few days
According to Bloomberg, who spoke with an Israeli spokesperson about the digital shekel, the Ethereum platform is being analyzed by the team seeking to create the national digital currency.
In May, the Central Bank of Israel said that the digitization of the local currency was a promising reality for the economy. With simpler and more secure transactions, the impact on the country could be positive.
In addition, BC Israel is even asking for ideas for apps to work on the network of its digital currency. In this way, it is clear that the local authority is not only planning to digitize its currency, but also to take advantage of the advantages already created by cryptocurrencies.
The recent conflict in Israel has increased Bitcoin donations to Hamas, a fact that may have made the local central bank more aware of the cryptocurrency market.
Israel’s Central Bank Still Conducts Internal Tests of National Digital Currency (Israel tests national digital currency)
Still in the testing phase, Israel’s national digital currency has no estimated time to be released to the public. All experiments with the technology, including Ethereum, are being done in-house.
Despite this, it is promising to see the interest of central banks in the cryptocurrency market, as the technology was born precisely to replace their uncontrolled printing of money.
It is noteworthy that the Central Bank of Brazil also conducts tests with the digital version of the Real. In principle, the Brazilian national currency will have its first results delivered in 2022, with the BC deciding whether it would go ahead with the launch of the innovation.
However, in recent weeks an initial study on the digital real was released by Bacen, making it clear that the guidelines are to create a safe currency, programmable money and the possibility of connecting with the PIX.
Even so, the new currency will be launched in the long term, in up to three years by BC do Brasil. A pioneer in studies on the subject, China is the first country to conduct public tests with its digital currency that does not work with a blockchain.