Home » Will the Bank of Israel launch a Digital Shekel? CBDC Project Manager says digital currencies can fight ‘black economy’ and tax evasion, compete with bank money – Yoav Soffer

Will the Bank of Israel launch a Digital Shekel? CBDC Project Manager says digital currencies can fight ‘black economy’ and tax evasion, compete with bank money – Yoav Soffer

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(Kitoko News) – More than 100 countries are investigating a central bank digital currency or CBDC, fiat money in electronic form via tokens on a blockchain. The Bank of Israel has been considering a CBDC since 2017, but has yet to decide whether to actually launch a version of it, called the digital shekel.

Israel’s central bank is grappling with a range of concerns, including a lack of privacy and anonymity, and potential government overreach. Yoav Soffer, his CBDC project manager at the Bank of Israel, argues that under the right conditions, the digital shekel could “allow more freedom.”

“I like to think that central bank digital currencies give people more freedom,” he said. “[It is in] For the public good of combating the illegal black economy and tax evasion. ”

“I am lucky to be born, raised and live in a democratic country,” Soffer continued. “We have an elected parliament, and the central bank governor is appointed by the president. I believe in the fact that it is operated by

He also added that a CBDC could create more competition for digital money issued by banks and financial institutions.

The Bank for International Settlements (BIS) defines a CBDC as a purely digitized banknote that can be used by individuals to pay to businesses, stores or one another (referred to as “retail CBDC”), or in financial markets. It can be used between financial institutions to settle transactions (called “wholesale CBDC”).

CBDC is intended to be used for everyday transactions registered on the blockchain. Critics claim the government could use his CBDC to monitor people’s spending habits, limit spending on certain items, and even cut off the ability of political dissidents to trade. doing.

Sofer said Israel’s CBDC policy is “in the public interest” and subject to the country’s democratic process.

“I believe in our institutions and the fact that we always operate in the best public interest. Probably not…we will probably seek support from both the government and Congress. [CBDCs].”

Soffer spoke with Michelle Makori, Lead Anchor and Editor-in-Chief of Kitco News.

Why CBDC?

CBDC legitimacy includes increased competition, innovation and improved cross-border payments, Soffer said.

“When you run out of cash, [commercial] Banks…or even future stablecoins may conquer the scene and lead us to a winner-takes-all situation,” he explained. .”

Soffer said CBDC will allow transactions and data to be linked to personal wallets, potentially enabling “microtransactions” of smaller items.

The Bank of Israel is also working with Norway, Sweden and the Bank for International Settlements on Project Icebreaker, an initiative to improve international retail and remittance payments.

“If successful, we hope to prove that one hub can really connect all CBDC systems,” he said. “Now, at Icebreaker, each central bank writes a smart contract that locks their money.”

Project Icebreaker aims to make cross-border payments faster, cheaper and safer, with “no counterparty or credit risk to those at the end of the transaction,” Sofer said. says.




CBDC and freedom

In response to a Freedom Convoy protest involving truck drivers demonstrating against Canada’s vaccine mandate, the Canadian government has imposed martial law and frozen the bank accounts of participants and those who donated to the protest. .

Some analysts suggest that a CBDC could make it much easier to freeze or seize such assets.

“I’m not an engineer, so I can’t answer. [whether it] Is it easier for the government [seize accounts] “Because I am a policy maker and I understand how we make policies, I can assure you that we will not make policies that are not enacted or included in policies. the public interest.”

Watch the video above to see what factors the Bank of Israel is considering ahead of its CBDC launch.


Follow Michelle Macori on Twitter. @Michelle Makori


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Disclaimer: The views expressed in this article are those of the author and may not reflect the views of the author Kikko Metals Co., Ltd. The author has made every effort to ensure the accuracy of the information provided. However, neither Kitco Metals Inc. nor the authors can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation of an exchange of commodities, securities or other financial instruments. Kitco Metals Inc. and the authors of this article accept no liability for loss and/or damage resulting from the use of this publication.

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