Is The Bank of Israel Going To Launch CBDC?
The adoption rate of cryptocurrency is increasing. People see the value in the long term in crypto. The government prefers to have more control over the financial system where crypto can change the game. Now Bank of Israel is considering launching Central Bank Digital Currency (CBDC).
This is not a final decision, but they are looking into it and how it impacts the economy after issuing CBDC. They are considering different scenarios where CBDC aka digital shekel may come to the rescue.
People can hold stablecoins. It gives access to anyone no matter where they live. Instead of using native fiat currency, people like to hold stablecoins. If native fiat currency loses its value fast, people usually make their move to do something to protect their purchasing power.
Fortunately, stablecoins give an easy solution for the time being. But if you think of a country's perspective, their native fiat currency might be under more pressure when citizens prefer stablecoins. It can have a negative effect on payment and the financial system.
The Bank of Israel Steering Committee observes the whole situation. More use of stablecoins can push the authority to issue digital shekel since people might move away from the native fiat currency. CBDC can empower the authority to establish more extensive control over the payment and the financial system.
Many countries are seriously working on launching CBDC. Some of them have already launched their CBDC pilot programs. The freedom you still have on usage of fiat currency, CBDC can change this and make it upside down. CBDC is good, but the question is, CBDC is good for whom.
The authority can see every single thing you do with CBDC and if they wish, they can block anything, control the money flow or increase the money flow in a certain direction. It is said that it would facilitate more financial inclusion. But what's the use of it if you lose your freedom and privacy? Will people welcome CBDC or will it make the adoption of crypto faster?
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Many cou tries are now supporting the usage of crypto currencies.