Israel Weighs “Digital Shekel,” Its Own National Cryptocurrency

Israeli officials are debating whether or not to create their own cryptocurrency, joining a growing list of governments that have proposed their own state-sponsored digital currencies in 2017.

Israel Debates the Merits of Crypto

The Israeli government may create its own “digital shekel,” according to sources close to Israel’s Finance Ministry.  

The discussions are part of an effort to curb the black market activity that comprises 22% of Israel’s GDP. Officials hope the digital shekel would reduce the use of cash in the economy, a payment option to which Israel’s underground has taken a liking in order to avoid taxes. Such evasion causes Israel to lose around ILS 50 billion in revenue annually. Ironically, cryptocurrencies are often utilized to pay for services on the dark web and black market, but Israeli lawmakers believe that a state-sponsored crypto could prevent the use of cash in such transactions.

Included in a sweeping bill, the digital shekel is one of numerous solutions proposed to combat tax evasion, including a ban on the use of cash to pay employee salaries. The state-issued cryptocurrency would fall under the watch of Israel’s National Bank.

“For the past few weeks the Bank of Israel has been looking at this matter, which has various aspects to it, including monetary and legal. There are many central banks studying the subject. There is no operative plan at the moment and perhaps there may never be, but it is something the Bank of Israel is studying,” an anonymous source said.

Governments Flock to Crypto

Israel joins the ranks of governments looking to crypto as a viable currency option.

Venezuela was the first nation in the world to announce plans for its own state-sponsored currency, following in the footsteps of Dubai, which became the first city to launch an official, government-backed crypto.

Russia recently jumped on this bandwagon as well, and has since moved forward with legislation to create a digital ruble. Back in September, Sweden’s central bank, the Sveriges Riksbank, revealed that it was looking into creating the e-krona, a digital counterpart to Sweden’s fiat currency.

State adoption of cryptocurrency may make some investors and enthusiasts uneasy, as it seems to spit in the face of Satoshi Nakamoto’s intention for Bitcoin to function as a decentralized method of financial exchange. While these currencies are still in the early stages of development, it’s becoming more probable that we will see national cryptocurrencies come to life in the coming year, and it’s likely that more countries will consider cryptocurrency solutions to solve their domestic financial problems for the foreseeable future.