On Tuesday, a Bank of Israel executive squashed hopes of the introduction of a digital Shekel. He stressed that Israel does not intend to be the first country in the world to issue a national currency.
Dr. Sigal Ribon was the Head of Monetary Policy Division of the Bank of Israel and spoke at the annual cryptocurrency summit of Bit2C.
Still not there
Ribon says that we are still far away from seeing an Israeli national crypto currency. Ribon stated that a national digital Shekel is not something we recommend. Ribon said that no developed country has yet issued a national digital currency.
“Another reason is Israel’s relative lack of technology structure. While we have many entrepreneurs and startups, our infrastructure is not sufficient to support them.
Is it really necessary to use blockchain?
Ribon had a crypto-skeptical view of the Israeli Central Bank, and even doubted blockchain’s applicability to certain aspects of the financial sector.
We see the value in allowing people transactions to be performed without intermediaries (similar cash money). But, physical cash is still very common in Israel, so it’s not urgent to offer a digital alternative.
A digital currency can also be used to digitize and streamline micropayments. We also see other non-DLT-based services that offer the same thing. The advantage of blockchain here is unclear.”
A monetary tool
She also mentioned that blockchain technology, specifically a national cryptocurrency coin, could be useful in promoting national monetar policy.
Blockchain can be used as a monetary instrument. For instance, it can serve as a good scheme for a universal basic income (helicopter money), or other Quantitive Easing policies.”
It might also nullify Central Bank’s ability impose negative interest upon the Shekel. Why should you be paying interest if you don’t need to keep your money in the bank?
Privacy is a positive aspect to the crypto economy, she believes. She believes it is important to be cautious and modest in how you implement it at the national level.
We also believe it is beneficial to allow some privacy. But in no way will the digital shekel be anonymous. We are required to comply with basic KYC requirements as a government agency.