Israel's Central Bank Experiments With Ethereum-Based Digital Currency

The Bank of Israel is experimenting with Ethereum ETH/USD technology as a substrate for its central bank digital currency (CBDC).

What Happened: According to a Wednesday Globes report, the central bank already issued digital currency for internal testing on a private blockchain network based on Ethereum software.

As of right now, no real money is transferred on the network, and the pilot project is meant to only be a technical feasibility study in no way connected to the public Ethereum network powered by Ether.

Why It Matters: The Bank of Israel's pilot described above is meant to examine the economic, business, legal, and technological implications of a CBDC implementation.

Earlier this week, Globes also reported that Bank of Israel Deputy Governor Andrew Abir said that a digital currency would have dramatic implications for the entire financial market, including the cryptocurrency industry and the banking system.

Abir explained that there's hope that a CBDC would eliminate banking, but he explained that this is not the case.

Read also: Goldman Sachs Trades Tokenized Treasury Bonds On JPMorgan's Private Blockchain Network For The First Time

Similarly, he also denied the idea that a digital currency would protect Bitcoin BTC/USD, which he said many believe to be the case.

He also claimed that there is "less than a 50% chance" that the central bank will launch its CBDC within five years.