Bank of Israel starts Digital Shekel Challenge to renew CBDC payment systems

The initiative aims to develop innovative payment solutions using the digital shek that is proposed by Israel's digital central bank currency (CBDC), about which was first reported in 2021.

inspired by the "Rosalind project" of the up to Innovation Center, the challenge is an important step in the BOI campaign plan for the possible edition of the digital fabric.

What is the Digital Shekel Challenge?

The Digital Shekel Challenge is designed in such a way that it invites a wide range of actors to participate, including private companies, public institutions and academic researchers.

The participants have access to a technological prototype that simulates the core functions of the digital fabric system, completely with an API layer. In this environment you can create and test real-time payment applications that are tailored to public use.

The challenge is divided into three phases: First of all, interested parties have to register for the call for participation with a given form.

Selected participants then receive access to the experimental environment, where they can start developing their projects.

In the last phase, these projects are presented to an expert body that evaluates them for originality, innovation and relevance for the Israeli economy.

The Bank Israel actively checks the possibility of a CBDC

The BOI has been investigating the potential of a CBDC since 2017 and intensifying its efforts in 2021.

The digital schekel is intended to offer data protection that corresponds to at least that of other digital payment methods and possibly even set higher standards.

At the international level, the Boi participated in joint projects such as the Sela project with the central bank of Hong Kong and the BIZ and successfully tested CBDC systems for retail. These efforts aim to reconcile user accessibility, competition, cyber security and the advantages of traditional cash.

To provide further information and answer questions, the Boi will hold a webinar on June 9, 2024. Participants and interested parties can register for this event to get further insights into the challenge.

The Digital Shekel Challenge represents a courageous step towards modernizing Israeli payment infrastructure. The aim is to use the latest technology to increase efficiency and promote innovations in the financial sector.

Andrew Abir, deputy governor of the bank of Israel, emphasized how important the cooperation is for the success of the digital shek.

Abir said: “The digital Schekel Challenge is another step towards the means of payment of the future with the aim of creating an innovative and competitive ecosystem.”

The deputy governor emphasized that the "Digital Shekel" initiative would promote cooperation between the central bank, the financial sector and other interest groups at home and abroad.