The Bank of Israel is moving forward with the development of a central bank digital currency (CBDC) for the New Israeli Shekel, known as ILA, which has been in consideration since 2021 without any pilot tests conducted yet.
A recent announcement highlighted the bank's support for the ILA CBDC, introducing a novel feature where the digital currency might bear interest, alongside revealing plans for its structure.
The proposed CBDC system would facilitate instant, 24/7 transactions, supporting diverse payment methods and offline usage, with enforced balance limits, aiming for a broad adaptation in the financial ecosystem.
While the CBDC could potentially accrue interest, a distinctive approach is taken towards its incorporation into commercial banks' portfolios, where it would not generate interest, aiming to balance the benefits of digital currency with existing banking structures.