Israel's Ministry of Finance have been working on a state-backed digital currency, which may be introduced starting in 2019, local media reports.
The so-called "digital shekel," identical in value to a physical shekel, would record all transactions made by the user via his or her mobile phone. This would make it more difficult for users to avoid paying taxes, thereby stemming the loss of millions of shekels' worth of tax money through the country's black market economy, the Jerusalem Post reported.
"You can imagine that instead of giving you a piece of paper saying the Bank of Israel on it, I can send you a piece of digital code that was issued by a central bank," the finance official said, explaining that speed is the key advantage of the potential new digital currency over traditional bank transfers.
The newspaper wrote that lawmakers have been looking for ways to reduce the use of cash in the country for over two years, thereby hinting that the digital shekel may provide a perfect opportunity to do so.
