What Kind of Currency Does Israel Use: Insights into Israeli Economy and Future Trends
The official currency of Israel is the Israeli New Shekel (ILS), also known as the Shekel. This currency has a rich history and is currently undergoing technological transformation as the country explores the possibilities of Central Bank Digital Currencies (CBDC). Read on to find out more about the Shekel and its future trends.
Introduction to the Israeli New Shekel
The Israeli New Shekel (ILS) is the currency of Israel and its territories. The Shekel is subdivided into 100 agorot, which are the smallest denomination used in transactions. The symbol for the Shekel is and it is often denoted as NIS (New Israeli Shekel) in international contexts.
Physical Representation of the Shekel
The Shekel is currently available in both physical and commemorative forms. Physical Shekels are made from nickel alloy, while commemorative coins are minted in gold and silver. These commemorative coins are not only a means of exchange but also valuable collectibles, making them a good investment for numismatists and collectors.
The Current Shekel in Circulation
Bank notes are available in denominations of NIS 20, 50, 100, and 200. Coins are available in NIS10, NIS5, NIS2, NIS1, and 50 and 10 agorot. The design of these notes and coins reflects the rich heritage and cultural significance of Israel, making them not just a form of currency but also a piece of history.
Exchange and Transfer of Currency
Unlimited sums of local and foreign money can be brought into Israel as cash, travelers’ checks, credit cards, or State of Israel bonds. Foreign currency can be exchanged at the airport, banks, post offices, most hotels, or licensed exchange agencies in large cities. It is important to note that when exchanging travelers’ checks, a passport is required. Exchange rates vary from one location to another, and banks often charge a commission.
The Future of the Israeli New Shekel
In 2021, the Bank of Israel confirmed the formation of a committee dedicated to the development of a digital Shekel. The committee has already released a report outlining their efforts to accelerate the launch of a local Central Bank Digital Currency (CBDC). This move places Israel among the ranks of other nations exploring the possibilities of digital currencies.
Two-Tier Structure of a CBDC
The proposed model for the CBDC indicates a two-tier structure. In this structure, the Bank of Israel would directly issue digital Shekels to private sector providers including banks, credit card companies, fintech firms, and technology firms. These providers would act as the interface between the public and the bank, facilitating the handling and distribution of digital Shekels. The use of Decentralized Ledger Technology (DLT), similar to blockchain, or centralized ledgers, would be employed to ensure transparency and security in transactions.
Cash Withdrawal and Payment Methods
Holders of international credit cards can withdraw local or foreign currency at banks that accept their credit cards. Automated Teller Machines (ATMs) are also widely available outside most banks, providing a convenient way for customers to access cash. Additionally, many businesses in Israel accept credit cards, making it easier for visitors to conduct transactions without carrying large amounts of cash.
Conclusion
The Israeli New Shekel is a vital part of the Israeli economy, reflecting the country's cultural and historical heritage. With the introduction of CBDC, the Shekel is set to embrace modern technology while maintaining its traditional roots.
Keywords: Israeli Shekel, Central Bank Digital Currency (CBDC), New Israeli Shekel