The Bank of Israel (BoI) has embarked on a significant step towards the development of its own central bank digital currency (CBDC), the digital shekel. Drawing inspiration from the Project Rosalind initiative led by the BIS Innovation Hub, Israel aims to expedite the creation of an advanced digital payments ecosystem.
In a recent report, the BoI outlined its plans to collaborate with various service providers to co-develop this ecosystem. This initiative, known as the “Digital Shekel Challenge,” marks a pivotal phase in Israel’s action plan for the potential issuance of the digital shekel. The challenge takes cues from Project Rosalind, a joint venture between the Bank for International Settlements (BIS) and the Bank of England, which focuses on developing prototypes for an application programming interface (API).
To facilitate this challenge, the BoI will provide participants with a sandbox environment integrated with an API layer. This setup will enable contestants to develop and test real-time CBDC payment systems aimed at serving the general public. Through this competitive framework, the BoI hopes to foster innovation and efficiency in the implementation of the digital shekel.
As Israel accelerates its efforts in digital currency development, the Digital Shekel Challenge stands as a testament to the nation’s commitment to modernizing its financial infrastructure and enhancing the digital economy.
