Fintech Week Tel Aviv 2023 saw many speakers and attendees and witnessed a Bank of Israel official voicing his support for CBDCs.
Yoav Soffer, who is the adviser to the deputy governor at the Bank of Israel, and also heading the CBDC program at the bank, spoke at length at the Fintech Week Tel Aviv 2023 on how central bank digital currencies (CBDCs) could end up being a useful solution for cross border transactions. He was referring to ‘Project Icebreaker’, which explored CBDC cross-border payments between the central banks of Israel, Norway and Sweden. The Bank for International Settlements undertook research on international payments.
“Cross-border payments are often perceived to face challenges of high costs, low speed, limited access and insufficient transparency, according to the Financial Stability Board,” said Soffer, while admitting that domestic payments in Israel had become very fast and affordable in recent times.
The senior official of the Bank of Israel claimed that a sample CBDC international transaction took less than two minutes, making it a more efficient and cost-effective method of international payments and remittances. It was also a competitive method in terms of foreign exchange, said Soffer.
He also admitted that once a few countries successfully used the payment mechanism, it would not be difficult to scale the project. But some issues needed to be taken care of, which included privacy, liquidity and integration of policies. Several central banks are currently exploring the possibility of deploying CBDCs and researching the same. Most of them have urged for a global regulatory policy for such CBDCs and other blockchain-related activities.