Bank of Israel Launches Digital Shekel Challenge

Bank of Israel (BoI) has launched a digital shekel challenge to innovate CBDC payment systems, inviting various stakeholders, both private and public sector entities, to participate in the challenge. The initiative seeks to nurture the development of innovative payment solutions using digital shekel.

Also read: Bank of Israel To Roll Out Sandbox for CBDC Experiments

According to BoI, the initiative is inspired by Project Rosalind, which was carried out by the BIS Innovation Hub. The central bank said the participants will create some cutting-edge services and applications that boost efficiency as well as the inclusivity of the payment system in Israel.

BoI Looks To Integrate CBDCs Into the Financial Ecosystem

The challenge is part of the bank’s broader efforts to integrate central bank digital currencies (CBDCs) into the financial network. This will foster an advanced and more resilient payment infrastructure.

As part of the challenge, selected projects will be showcased at a dedicated conference that will also afford them a platform for collaboration and the exchange of ideas.

Also read: The Bank of Israel’s Consideration for a Digital Shekel

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

A collaboration between the Bank for International Settlement (BIS) and the Bank of England, Project Rosalind aims to build prototypes for an application programming interface (API).

“The digital shekel is another step towards the means of payment of the future, with the aim of creating an innovative and competitive ecosystem of ways to make payments.” BoI deputy governor Andrew Abir

“The success of the digital shekel will depend on cooperation between the Bank of Israel and the private and government sectors,” added Abir.

The Bank of Israel will provide a sandbox environment attached to a layer of API, as part of the challenge. This will see participants battle it out to build a real-time CBDC payment system for ordinary people.

Bank of Israel Will Prioritize Original Innovations

The BoI will implement the challenge in three phases. The first phase entails applications and presentations, which will be followed by access to the network by selected projects. The third and final stage will entail a final presentation to the judges.

Also read: Bank of Israel Deputy Governor Advocates for Digital Currency

Successful implementation of the project could potentially bridge the gap between the Web3 industry and government, including in decentralized finance.

“Priority will be given to uses with original and innovative characteristics in the payments world, whether they are improvements to existing applications or completely new applications,” said the Bank of Israel.

While CBDCs are developed for universal use cases, participants in this challenge will get the green light to build for niche markets. Earlier in April, Abir said the competition is good for the economy, adding that the public will throw their weight behind a digital shekel.

“The digital shekel will not be developed by some anonymous Satoshi Nakamoto. Everyone will know who is behind the digital shekel and who is responsible for it,” said Abir.

Cryptopolitan reporting by Enacy Mapakame