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Saturday, August 13, 2022

Israel Looking at Ethereum Blockchain For its CBDC Development

Bank of Israel is reportedly set to start its CBDC pilot and they might go with Ethereum as the base blockchain on top of which it would work. The central bank reportedly did its first trial using blockchain but there is no confirmation from the Israeli Central Bank if Ethereum indeed would be a part of the program, but it is definitely among the technologies that the bank is considereing in the initial stages. Yoav Soffer, CBDC project manager at the Bank of Israel said,

“We did a trial with Ethereum technology, not because we think that that’s necessarily the technology we’ll use, but because it was a technology that was available for us to get our hands dirty with, in order to understand its advantages and disadvantages,”

The pilot CBDC saw digital and technical implementation of Digital Shekels where the trials were conducted on Ethereum with a digital wallet. The participants sent the assigned digital shekel from one wallet to another. The Ethereum technology used for the pilot was quite different from the main blockchain that powers Ether cryptocurrency.

Bank of Israel Examines Economic, Legal, and Technological Aspects of  CBDC

Bank of Israel tested the economic, legal and technological aspects of CBDC during its pilot and used a similar technology to what central banks of Australia, Hong Kong, and Thailand have used earlier.

“It’s rather challenging to run a project like this. In general, projects at the Bank of Israel have start and finish dates. You know when they will end and what you need to achieve along the way. We don’t know when this project will end, with all that that implies,” Soffer said at last week’s conference.

China is currently leading the CBDC race with its digital yuan almost ready for launch. In fact the public trials for digital yuan has been going on for nearly two years now after completion of its development in 2019.


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