Andrew Abir, deputy governor of the Bank of Israel, recently said that traditional cash was once competitive with other payment methods, but its role has “eroded” because of technological limitations as finance becomes increasingly digital.
Abir made the statement during his speech at the “Engines of the Israeli Ecosystem” conference on April 16, where he also announced a new sandbox to test a central bank digital currency called the digital shekel.
The API-based sandbox will allow financial entities, fintech companies, and other participants to participate and develop use cases for the digital shekel.
Catalyst for competition
The central bank official said that CBDCs have the potential to become a “trustworthy catalyst” to increase financial competition among banks.
He said the digital shekel’s versatility will allow it to compete with other digital payment methods that have sidelined traditional cash in recent years. CBDCs can be used in digital and e-commerce transacti
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