Israel Is Planning for a State-Sponsored Cryptocurrency “Crypto Shekel”

Cryptocurrencies powered by the blockchain technology have really turned out to be the source of instant payments across the globe, at lower cost and with higher cryptography security. With the growing popularity of cryptocurrencies, banks and a few governments have started considering this technology as a replacement for the existing system.

The latest report says that the Bank of Israel and its Ministry of Finance is considering and examining options for having its own state-sponsored cryptocurrency - the digital shekel or the crypto shekel. The major motive behind such a system is to have instant payment system at work and reduce the amount of cash flowing into the economy thereby making it difficult to evade taxes.

Since several months, regulators are working on a plan of state-owned cryptocurrency and the government could possibly arrive with a framework in the next month on January. The digital shekel will be just similar to the physical shekel in use which will help to keep the record of transactions and thus reduce tax evasion.

The advantage with cash payments is that one can make instant payments unlike in case of issuing a cheque or bank transfer. Virtual digital currencies also allow for immediate transfer of hands just like the cash system. An official familiar with this matter said: “You can imagine that instead of giving you a piece of paper saying the Bank of Israel on it, I can send you a piece of digital code that was issued by a central bank.” The digital currency can be stored in the digital wallet.

In order to accomplish this task, the Bank of Israel is looking to incorporate blockchain technology into its operations. Blockchain technology is a distributed public ledger wherein anyone on the network can have an access to verify transactions. Hence it reduces the possibility of financial frauds to a great extent.

In addition to Israel, there have been other countries as well who have floated a similar idea previously. Japan, who has been a very active participant in the crypto market since the very beginning is also planning to launch its own cryptocurrency “J-Coin” before the start of Olympics 2020.

With cryptocurrencies entering into the mainstream visibility this year, the next year of 2018 is expected to see a lot of streamlining and regulatory framework being build pertaining to the use of cryptos. Many investment products are also developed which are expected to bring some stability in the much volatile crypto markets.