A month after publishing a public consultation on options for establishing immediate payments systems, the Bank of Israel is reportedly considering issuing cryptocurrencies.
The Bank of Israel is considering utilising digital currencies to speed up payments and reduce cash across the economy, according to a report by Reuters citing a source inside the bank.
According to Reuters‘ source, while no decision has yet been made and the bank itself has not responded to such reports, the Israeli government is preparing to pass legislation on digital currencies and include them in its 2019 Budget and economic package if the bank goes ahead.
The legislation could potentially cover security, centralisation, and money-laundering measures, the source added, according to Reuters.
The Bank of Israel had last month put out a call for public consultation on establishing “an infrastructure for immediate payment in Israel”.
“The public consultation is the first stage in a process of setting up an advanced, efficient, and reliable infrastructure in the payment system in Israel, which will be added to the existing payment and settlement systems and will serve for clearing immediate retail payments, like similar infrastructures existing in various countries worldwide,” the bank said in its document.
The bank added that using immediate means of payment would enable time- and cost-efficient payments available 24/7; a decrease in the Israeli shadow economy by reducing paper-based payments; an increase in the liquidity and a decrease in the costs of credit to businesses; an increase in payment systems competition “by the entrance of new players who offer immediate payments throughout the transaction execution chain”; and an increase in payments resiliency.
“The Bank of Israel continues to act to promote innovation and efficiency in the payment system in Israel,” Bank of Israel director of Accounting, Payment, and Settlement Systems Irit Mendelson said.
“Establishing an infrastructure for clearing immediate payments will provide a response to many needs existing in the Israeli payments market, and will enable Israeli citizens to use means of payment that are advanced, faster, and convenient, similar to what is customary in other advanced economies.”