The Digital Shekel Programme
The Bank of Israel's digital-shekel project is one of the more advanced central-bank digital currency (CBDC) programmes globally. The 2026 status is design-mature, decision-pending.
What the programme is
The Bank of Israel began formal research on a central-bank-issued digital shekel in 2017, accelerated work in 2021, and through 2024–2026 has run a series of design-mode pilots covering retail and wholesale use cases. The programme is among the most advanced CBDC efforts globally on technical-design maturity, even though formal issuance has not been decided.
The design choices
The Bank of Israel has signalled a preference for a two-tier CBDC architecture (central bank issues; commercial banks and licensed PSPs distribute), with privacy preserved for small-value transactions and supervisory access for larger flows. The architecture is intended to coexist with, rather than displace, commercial bank deposits — addressing the long-standing concern that a CBDC could disintermediate the banking system.
The 2024–2026 work
Three pilot tracks have been visible: a domestic retail-payments pilot covering wallet provisioning and merchant acceptance; a wholesale settlement pilot covering inter-institutional value transfer; and a cross-border pilot exploring CBDC-to-CBDC settlement with partner central banks (mBridge and Project Icebreaker-family work). Public reporting on each is staged but substantive.
The decision
The Bank of Israel's governance position through 2026 has been that the digital shekel is design-ready but issuance remains conditional on macro and financial-stability conditions, on commercial-banking sector consultation, and on cross-border regulatory clarity. Issuance decisions are expected within the 2026–2028 window. The architecture, the design choices, and the institutional posture are now mature enough to plan around.