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Andrew Abir’s Vision: Revolutionizing Israel’s Currency with the Digital Shekel

Israel Cbdc, Digital Shekel

Following his recent comments on CBDC, Andrew Abir, the deputy governor of the Bank of Israel, has sparked a range of reactions. In a speech published on the website of the central bank, Abir expressed a fresh perspective on CBDC, which has traditionally been seen as having negative consequences for commercial banks.

Innovation in the Israeli Banking Sector is Being Propelled by Competition

Despite the positive effects of increased competition in Israel’s banking sector—the product of more than a decade of dedicated work—”we still have a long way to go,” Abir remarked. In response to the Bank of Israel’s decision to combat inflation, banks around the country boosted interest rates on loans and credit, while deposit rates were only “partial and slow” to rise.

The deputy governor made the observation that commercial banks are not popular with the public in many nations, Israel included. Some of the resentment at Israel’s banking system stems from the fact that certain industries require a higher degree of competition than others.

Security of the Digital Shekel

Even though it is still in the conceptualization phase, Abir was certain that the people would embrace the digital shekel. The digital shekel would increase the liquidity of central bank funds and would also benefit the Bank of Israel. “No one named Satoshi Nakamoto will create the digital shekel. Everyone will be able to identify the digital shekel’s creator and backer: the same Bank of Israel that powers the currency we all use every day.”

Abir asserted that the digital shekel would have numerous benefits for the bank, such as facilitating digital payments and counteracting the decline in central bank money due to technological advancements in the private sector. The mere ability to store digital shekels would compel banks to pay higher interest rates. Thus, the digital shekel would give the central bank a tool to regulate the amount of interest that is transmitted.

READ:  Michelle Bowman Made Striking Comment about CBDC

 

 

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