Following in the footsteps of Russia and Dubai, Israel is considering offering a national cryptocurrency - a digital shekel - which would correspond in value to physical shekels.
According to the sources close to the Finance Ministry, Israel’s black market is approximately 22 percent of the country’s gross domestic product. A digital currency, registered with the government of Israel, would make black market transactions less possible.
Additionally, per the news source, the government is considering legislation that would substantially reduce the amount of physical cash in the economy. For example, one suggestion would be a law against paying wages in cash.
The process for the creation of the digital shekel is just getting underway, however. The government has offered the ‘Economic Arrangements Bill,’ which, if passed would create a separate panel for the Bank of Israel to consider creating the digital shekel.
The addition of the physical cash laws is the result of a failure by the Knesset to pass legislation of the same ilk two years ago. The pressure for digital currency adoption is high, as recent comments from the Israeli Prime Minister indicate.
Colu, an Israel-based Blockchain wallet application, has been part of the conversation with the Israeli government in pursuing a digital currency. Mark Smargon, VP Blockchain Colu told Cointelegraph: