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CBDC: What will the consequences be if Israel adopts the central banking digital currency? part II

Concept of Central Bank Digital Currency – Modern banking cryptocurrency blockchain technology. (Photo: Shutterstock)

Is it possible that Israel, destined by God to be a light to the nations, will also adopt the central banking digital currency?

You might be surprised to learn that, in June, the “Bank of Israel shared details about its first set of technical trials for a central bank digital currency – CBDC. One trial tested smart contracts, raising the issue of who should be allowed to write and police them.” 

In September, Israel teamed up with Norway and Sweden to explore the implementation of a centralized digital currency, engaging together to test technical systems through which this might work. The teams are expected to reveal their findings during the first quarter of 2023 as they relate to retail payments.

So, the short answer is ‘yes.’ Israel is not only thinking about jumping on the CBDC bandwagon – along with 100 other countries exploring this direction – but already has begun to investigate and engage in trial enactments to determine its viability. 

In fact, Israel began imagining the viability of CBDC as far back as 2017, conducting a pilot test in 2021, and already considering the possibility of calling the digital shekel currency “Shaked” (a combination of the two words “shekel” and “digital”).  

But as mentioned in Part I, there is no doubt that such a dramatic change in our monetary system would have to be preceded by a slick, enticing and attractive campaign to convince everyone that this is being done with their best interests in mind – taking into consideration their protection, benefit and convenience. 

So, how predictable are the words of Bank of Israel’s CBDC project manager Yoav Soffer who claims that, “under the right conditions, the Digital Shekel could ‘allow for more freedom.’”

He assures us that there is justification since, “It is in the public interest to fight the illicit black economy and tax evasion.” 

But when confronted with the warnings of critics who claim that CBDCs will monitor people’s spending habits and could have far-reaching political consequences for those who may not support the government, Soffer is quick to say, “Israel’s CBDC policy would be in the ‘public interest’ and subject to that country’s democratic processes.”

That abstract comment opens up a plethora of questions, such as:

What happens if democracy, as we know it, changes into a more autocratic system under the control of one person? Does anyone remember that it was one person who made an exclusive deal between Israel and Pfizer, on behalf of the Israeli people, eventually trying to mandate the deal for all Israel’s citizens?

What happens if digital banking requires a certain code of behavior and ethics by its citizens – one which might be unacceptable to many? 

What happens to your hard-earned funds for which you labored throughout your entire life? Do they become limited or are they even accessible without full compliance with the new digital monetary system?

What happens if you belong to a group, or contribute to a group, seen as undesirable or unsupportive towards the government’s actions? Will you be fined or penalized for your association with them? Will you be afforded a defense, or any type of democratic hearing, or will money be arbitrarily withdrawn from your account?

Will you be obligated to comply with certain medical or social demands intended to prop up your standing, or which, if you choose to opt out, will injure your ability to access your funds?

This leads me to my next question:

Do Israelis have any right to privacy as it concerns the use of their own personal funds? If part of the function of a central banking digital currency is to track usage, and analyze spending habits to determine their legitimacy and worthiness, whose money is it ultimately? The moment your spending choices come under question, it has ceased to be solely your money.

Given the fact that Israel boasts the most ethical army in the world, as well as being one of the few countries to swiftly offer humanitarian help to any country that needs and desires it, why would we decide to join a global banking system which intends to spy on the spending habits of its customers, as well as be judge and jury as to how we might conduct ourselves concerning our life choices?

For now, Israel has not spoken much about the possibility of launching a digital currency, but the Bank of Israel continues to research and be active in its development and planning. 

However, given its claim that the digital shekel “will not pose a threat to the national financial system,” it might not be too long before CBDC is widely introduced to the Israeli public as a fait accompli.  

Lastly, it should be noted that “blockchain,” the technology under which cryptocurrencies operate, will serve as the basis for a central banking digital currency. Blockchain is defined as “a technology which allows assets to be exchanged electronically, recording the facts and details of a transaction without the ability to make any changes to those records later. It is information recorded in a distributed ledger with identifiers for the sender, recipient, time and transfer amount. In effect, it is an unbroken sequence of blocks, so that anyone can track the entire transaction history of a particular asset, all the way back to its origin.”

Try digesting that definition for a few minutes! 

It might be the best and most convincing argument as to why CBDC is likely to turn into giant government overreach into personal wealth, giving it the capacity to become the ultimate puppet master when it comes to making people do whatever it is that it demands from them. 

Seize their money, and now you own them. Whether they eat, pay their bills or are allowed to participate in life is now in the hands of the ones who can see their payment history and determine if they get a passing grade.

So why would that threaten anyone? 

Just a reminder to Israel … in the words of one of our own prophets, Micah 6:8, “The Lord has told you what is good and this is what He requires of you: to do what is right, to love mercy and to walk humbly with your God.”

Israel needs to think very carefully as to whether CBDC can be enacted and, at the same time, allow us to follow the wise counsel given to God’s chosen people!

Read more: GUEST COLUMN

A former Jerusalem elementary and middle-school principal and the granddaughter of European Jews who arrived in the US before the Holocaust. Making Aliyah in 1993, she is retired and now lives in the center of the country with her husband.

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