Israel’s central bank recently disclosed plans to launch an Israeli shekel CBDC. This digital shekel will have interest-bearing features. The country’s financial regulator shared the news on Monday, March 11.
It noted that the move was part of its plans to integrate modern financial technology.
Israel Advances CBDC Launch Plans
There will be two tiers to the implementation of the digital shekel. It will include offline capacity, many payment options, and round-the-clock instant transactions. Additionally, the digital shekels will feature built-in balance limitations. Several countries have launched CBDCs. But, Israel’s digital shekel differs due to its interest-bearing abilities. This means the CBDC can appeal to both users and investors.
🚨The Bank of Israel releases their CBDC architecture draft.
As we know Bank of Israel tested Project Sela with HK Monetary Authority in 2023.
Sela’s the first CBDC project inspired by $QNT Rosalind’s use of APIs.
It seems that Israel’s made their choice for CBDC architecture.… pic.twitter.com/giIMhcIaRN
— 🥖Tokenicer✲⥃⬢ (@Tokenicer) March 12, 2024
Privacy is one of the biggest concerns for CBDCs globally. So, critics believe CBDCs could grant governments access to private details of users. The Bank of Israel addressed these concerns in its announcement. The CBDC’s design restricts the central bank from accessing personal data. Also, the central bank would have no access to the balances and transactions of consumers. This ensures and promotes privacy.
The digital shekel’s ability to provide interest adds a new dimension to the CBDC market. It would enable banks to incorporate fiat shekel deposits into their short-term liquidity. However, without charging interest.
Interestingly, commercial banks in Israel have a 4.86% interest rate on such accounts. Additionally, Israel’s CBDC data format will enable the application of user-customized interest. It would also support holding restrictions.
Dutch Central Bank Fines Crypto.com
The Netherlands’ central bank, De Nederlandsche Bank (DNB), said Crypto.com operated without licenses. The regulator fined the exchange 2.85 million euros ($3 million) for offering illegal services between May 21, 2020, and at least November 8, 2022.
⚠️ DUTCH CENTRAL BANK FINES https://t.co/poLSlM5fYY FOR BREACHING RULES
Full Story → https://t.co/iq5lSbbapy
The Dutch central bank said on Wednesday it had fined virtual assets exchange https://t.co/NRRx72ctFT 2.85 million euros ($3.11 million) for offering its services in…
— PiQ (@PiQSuite) March 13, 2024
Dutch policies mandate crypto companies to register before providing their services. Companies that fail to comply face a possible fine of up to 2 million euros.
Last year, Binance faced regulatory issues in the Netherlands. The exchange failed to secure a license from the country’s central bank.
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