Bank of Israel to begin CBDC trials with Sweden, Norway

The Bank of Israel is set to begin testing features of its central bank digital currency (CBDC) in a joint effort with the Central Bank of Norway and Sveriges Riksbank, Sweden’s central bank. As part of the new initiative, called Project Icebreaker, the banks are creating proof-of-concept digital currencies assisted by the BIS Innovation Hub Nordic Centre. 

A central bank digital currency (CBDC) is a digital currency issued and governed by a central bank. In the case of Israel, a CBDC would be a digital new Israeli shekel (NIS) issued and controlled directly by the Bank of Israel, possibly even after it is transferred to a private citizen. 

Furthermore, whereas cash transactions are anonymous, CBDC transactions will not be, as stated by Federal Reserve Chairman Jerome Powell Tuesday. 

Among the various features to be tested on CBDC, the three central banks will focus on enabling cross-border payments using CBDC, according to Globes. While currently, cross-border payments using foreign currencies involve several banking systems, high costs and present difficulties for some retail transactions, Project Icebreaker aims to simplify cross-border payments and minimize their costs. 

Project Icebreaker is expected to finish by the end of this year, with a final report expected in Q1 2023. 

"Efficient and accessible cross border payments are of extreme importance for a small and open economy like Israel and this was identified as one of the main motivations for a potential issuance of a digital shekel,” said Bank of Israel Deputy Governor Andrew Abir. “We are privileged to be exploring the topic in this project together with partners that have vast knowledge and experience on CBDCs as well as on cross-border payment policies. The results of the project will be very important in guiding our future work on the digital shekel." 

Project Sela, a similar project launched between the Bank of Israel and the Hong Kong Monetary Authority earlier this year, is exploring a “two-tier exposure-less" CBDC. 

“This project will explore the feasibility of an architecture in which intermediaries in the two-tier system are ‘exposure-less’ - they provide technological access to the CBDC system, conduct the ‘Know Your Customer’ processes, and provide consumer services, but are not financially exposed, at any point of the processes of obtaining, transferring, or redeeming CBDC,” said the Bank of Israel in a June statement. 

As reported by America’s Frontline News, Israel has already begun restricting cash transactions and even the amount of cash an Israeli citizen can keep in their home. 

While the State of Israel mentions money laundering and tax evasion as justifications for these laws, they are not the only factors. The government also aims to control how citizens spend their money and ultimately phase out cash altogether, allowing only digital payments. 

“The Law for the Reduction in the Use of Cash was designed to change the public’s consumption habits and encourage a switch to digital means of payment, with a view to almost complete replacement of the use of cash in the future,” reports Globes.  

Israel’s globalist government is aligned with the World Economic Forum (WEF), whose Agenda 2030 hinges on a combination of "digital ID, digital payments, and data governance.”