Could Israel soon use an official digital currency? A new Bank of Israel report shows significant progress on the project, concludes that the benefits exceed the costs and identifies the end of 2026 as the point when a final decision is expected.
The Bank of Israel has published a comprehensive report reviewing progress on the Digital Shekel project. While announcements of this kind are often highly technical, the report offers a practical look at the final stages of the assessment and presents clear conclusions about the project’s economic viability.
Benefits Exceed the Costs
The report’s main finding comes from a cost-benefit analysis conducted by the project team. After considering the effects on the Bank of Israel, financial institutions and the public, the analysis found that the benefits of the Digital Shekel would exceed the costs of establishing it. The Bank of Israel concluded that issuing the digital currency would contribute to the economy’s overall welfare.
A Gradual Launch
The Bank of Israel recognizes that developing a complete system with every possible function could delay the project. It is therefore considering a phased approach. The Digital Shekel may initially launch in a more basic and focused form to reduce costs, save time and manage technological risks. More advanced capabilities could be added gradually after launch.
A Currency for the Public and Financial Institutions
The report says the bank has examined a “multi-purpose Digital Shekel” model. This would involve two connected systems: a retail system for everyday use by individuals and businesses, and a wholesale system intended to improve transfers and activity between banks and other financial institutions.
What Comes Next?
The year 2026 is expected to be decisive for the future of the project. The Bank of Israel team will focus on three main steps:
- Detailed technical specifications: Turning the initial plans into a precise system specification.
- Road map: Developing a practical implementation plan for issuing the currency.
- Final recommendation: Near the end of 2026, a summary document will be submitted to the governor of the Bank of Israel. It will consolidate the findings and include a clear recommendation on whether to proceed with issuing the Digital Shekel.
View the report here.
