Israel’s central bank is said to have completed a secret pilot for a central bank digital currency (CBDC) based on Ethereum’s technology. Globes, an Israeli financial news site, published the assertion, which was then confirmed by BNN Bloomberg.

The Bank of Israel (BOI) allegedly completed its pilot in an experimental, closed environment based on Ethereum’s architecture, involving the trial creation of tokens representing digital shekels and their transfer across digital wallets, according to Globes.

According to Globes, the BOI successfully tested its ability to design a car ownership certificate transfer using nonfungible digital tokens (NFTs) as part of its pilot and conducted a transaction in which NFT payment was made a condition of the certificate’s transfer and vice versa. There was no need for a central intermediary or trustee because the transaction was instantaneous.

According to the paper, this application is just one example of what payment service companies charged with offering public digital wallets could be able to create. According to reports, the BOI has requested industry players to suggest a variety of smart applications that may be built on the infrastructure of a future digital shekel.

Globes, on the other hand, claimed that the central bank has not been transparent regarding its current experimental CBDC study in general. During a talk at the Fair Value Forum in Herzeliya IDC earlier this month, the BOI’s deputy governor only confirmed that a preliminary CBDC pilot was already underway, according to Cointelegraph.

The deputy governor’s concession was portrayed by Globes as the consequence of him being “pushed into a corner,” and the central bank was blamed for not reaching out to local industry enough as it began to explore the exceedingly complex subject of CBDCs.

”This draft does not represent a decision of the Bank of Israel regarding the characteristics of the digital shekel if issued. The draft model forms the basis for discussion and examination of alternatives by the working teams dealing with the issue at the Bank of Israel, and, following the publication of this document, it will also serve as a basis for discussion in the professional community in Israel about the characteristics required for the digital shekel.”

After a panel led by former governor Dr. Karnit Flug recommended against issuing a digital shekel in late 2018, this involvement with CBDCs suggests renewed impetus and interest in CBDCs within the institution.

While the BOI’s May study makes no mention of Ethereum, it does say that “smart contracts, programmable money, and the like” are among the “many prospects that a digital shekel could offer for the innovation of the Israeli economy’s payments system.”

Neither smart applications nor NFTs is mentioned in the BOI report from May. It does, however, mention the potential benefits of employing distributed ledger technologies for many aspects of the digital shekel ecosystem, as opposed to present, centralized solutions.

The bank’s research also emphasized the interdependence of digital identification technologies and CBDCs, as well as the advantages of undertaking proofs-of-concept that might aid the institution in determining the relevance, risks, and benefits of a digital shekel for the Israeli economy as a whole.

Source: Crypto Breaking News