The Bank of Israel has published a preliminary high-level design for a potential central bank digital currency, the digital shekel (DS), and is inviting feedback from the public and the professional community on the proposed system’s key features. The document consolidates work carried out since 2017 and notes that the high-level design was completed at the end of 2024, while emphasising that no decision has been made on whether to issue the DS. Under the design, the DS would be a Bank of Israel liability operating alongside cash and existing payment methods, and would be legal tender in Israel with 1:1 convertibility with other forms of shekel supported by quick conversion to and from cash or account money. It is envisaged as a multipurpose CBDC for both the general public (retail) and financial entities (wholesale), featuring immediate and final payments, offline payments, interoperability with other payment systems including bank accounts, and basic use that would be free for private users with significantly lower costs for businesses than current digital payments. The system would use a two-tier model in which “Digital Shekel Payment Service Providers” connect end-users without holding their money, with scope for “Additional Service Providers” to offer services such as budget management and advanced payment applications under lighter regulation; the DS itself would not be programmable money. On privacy, the design proposes a higher level than existing digital payment methods, including limited-amount anonymous payments, and states that personally identifiable information on user balances and activity would not be available to the Bank of Israel or any other central entity, remaining with payment service providers. Feedback is to be provided using the questionnaire attached to the design document, and the bank notes that further detailed design work, collaboration across public and private sectors, and a public information campaign would be required if issuance proceeds.

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