Clear Thinking on CBDCs in Israel

At the Digital Currency Conference, the Bank of Israel (BOI) laid out its CBDC approach starting with looking at the rapid growth of digital payments as a proportion of all payments across the world. Cash may be holding up in absolute numbers but relative to the total, it is falling fast.

Central banks are clear that maintaining central bank money is needed to maintain the uniformity of money, for financial stability, to maintain competition and monetary transmission. When surveyed about the rationale for exploring retail CBDC, the BIS CBDC 2023 survey found that just over 80% gave preserving the role of central bank money as being important or very important. For wholesale CBDC that figure was over 70%.

For BOI, the key drivers are: