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Israel Unveils CBDC Challenge, Russian Firms Resort to Tether for Int’l Payments

May 29, 2024

Israel is looking to fast-track the development of its native central bank digital currency. The Bank of Israel is looking to tie-up with service providers to help it create a digital shekel payments ecosystem. To advance an "action plan for a possible issuance of the digital shekel,” the government is launching a challenge.

The translated version of the announcement read,

“As part of the action plan for a possible issuance of the digital shekel, the Bank of Israel is planning the "Digital Shekel Challenge" - an experiment inspired by the "Rosalind Project," carried out by the BIS Innovation Center.”

Andrew Abir, the Deputy Governor of the Bank of Israel pointed out that financial industry players and stakeholders from the payments ecosystem from both Israel and abroad will be allowed to cooperate with the government “in a practical way in thinking, planning and designing the digital shekel.”

The chosen entities by the central bank will be provided with an experimental environment integrated with a layer APIs. The challengers will compete to build real-time CBDC payment systems for the general public.

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In other international news, Russian companies have been using stablecoins for cross-border payments. A recent report pointed out that at least a couple of top metal producers - that are unsanctioned -  have started using Tether’s USDT and other crypto alternatives to cater to Chinese client and supplier transactions.

Here, it is worth noting that China did not join other countries in imposing international sanctions on Russia. Itis one of the main export markets for several Russian commodities. Alongside, it is also a supplier of goods and equipment.

Ivan Kozlov, co-founder at Resolv Labs pointed out that countries that are facing capital controls and dollar liquidity issues have been leaning towards crypto payments, especially stables. He labeled the same to be a relatively common practice and said,

“With stablecoins, the transfer may take just 5-15 seconds and cost a few cents, making such transactions pretty efficient when the sender already has an asset base in stablecoins.”

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