The Bank of Israel is experimenting with Ethereum (CRYPTO: ETH) technology as a substrate for its central bank digital currency (CBDC).
What Happened: According to a Wednesday Globes report, the central bank already issued digital currency for internal testing on a private blockchain network based on Ethereum software.
As of right now, no real money is transferred on the network, and the pilot project is meant to only be a technical feasibility study in no way connected to the public Ethereum network powered by Ether.
Why It Matters: The Bank of Israel's pilot described above is meant to examine the economic, business, legal, and technological implications of a CBDC implementation.
Earlier this week, Globes also reported that Bank of Israel Deputy Governor Andrew Abir said that a digital currency would have dramatic implications for the entire financial market, including the cryptocurrency industry and the banking system.
Abir explained that there's hope that a CBDC would eliminate banking, but he explained that this is not the case.
Similarly, he also denied the idea that a digital currency would protect Bitcoin (CRYPTO: BTC), which he said many believe to be the case.
He also claimed that there is "less than a 50% chance" that the central bank will launch its CBDC within five years.
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