IDEAS home Printed from https://ideas.repec.org/a/mgs/ijmsba/v8y2022i6p37-43.html
   My bibliography  Save this article

Israel`s Cash Cap and Implications on the Country’s CBDC Development

Author

Listed:
  • Andreas V. Ledwon

    (Institute for Strategic Finance, FOM University of Applied Sciences for Economics and Management, Germany)

  • Clemens C. Jäger

    (Institute for Strategic Finance, FOM University of Applied Sciences for Economics and Management, Germany)

Abstract

This paper analyzes the latest developments in Israel`s law to reduce the use of cash and its implications on the Country’s retail Central Bank Digital Currency (CBDC) development. Hence, the goal of our paper is twofold: (1) to shed light on the latest limitations of Israel’s law to reduce the use of cash as of 1st August 2022, also known as “Locker Agreement”, and (2) highlight its implications promoting advanced means of payment and a retail CBDC as an alternative to paper-based means of payment such as cash and checks while enabling privacy. In particular, we present to the audience Israel’s latest CBDC blockchain trials aiming to overcome raised privacy concerns. We conclude by challenging the effectiveness of highlighted motivations to potentially issue a Digital Shekel and assess the desired financial inclusion from various angles, before providing an outlook in an area which would be of benefit and interest to academics and practitioners. Finally, we encourage for further empirical research contributions on this field.

Suggested Citation

  • Andreas V. Ledwon & Clemens C. Jäger, 2022. "Israel`s Cash Cap and Implications on the Country’s CBDC Development," International Journal of Management Science and Business Administration, Inovatus Services Ltd., vol. 8(6), pages 37-43, September.
    • Handle: RePEc:mgs:ijmsba:v:8:y:2022:i:6:p:37-43
    DOI: 10.18775/ijmsba.1849-5664-5419.2014.86.1004
    as

    Download full text from publisher

    File URL: https://researchleap.com/wp-content/uploads/2022/09/04_Israels-Cash-Cap-and-Implications-on-the-Countrys-CBDC-Development.pdf
    Download Restriction: no
    File URL: https://researchleap.com/israels-cash-cap-and-implications-on-the-countrys-cbdc-development/
    Download Restriction: no
    File URL: https://libkey.io/10.18775/ijmsba.1849-5664-5419.2014.86.1004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Kenneth S. Rogoff, 2016. "The Curse of Cash," Economics Books, Princeton University Press, edition 1, number 10798.
    2. Amartya Lahiri, 2020. "The Great Indian Demonetization," Journal of Economic Perspectives, American Economic Association, vol. 34(1), pages 55-74, Winter.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Antón, Arturo & Hernández-Trillo, Fausto & Ventosa-Santaulària, Daniel, 2021. "(In)Effective tax enforcement and demand for cash," Journal of Macroeconomics, Elsevier, vol. 70(C).
    2. Das, Satadru & Gadenne, Lucie & Nandi, Tushar & Warwick, Ross, 2022. "Does going cashless make you tax-rich? Evidence from India's demonetization experiment," The Warwick Economics Research Paper Series (TWERPS) 1393, University of Warwick, Department of Economics.
    3. Garín, Julio & Lastrapes, William D. & Lester, Robert, 2021. "On the welfare effects of phasing out paper currency," European Economic Review, Elsevier, vol. 137(C).
    4. Das, S & Gadenne, L & Nandi, T & Warwick, R, 2022. "Does going cashless make you tax-rich? Evidence from India’s demonetization experiment," CAGE Online Working Paper Series 605, Competitive Advantage in the Global Economy (CAGE).
    5. Rösl, Gerhard & Seitz, Franz, 2022. "On the stabilizing role of cash for societies," IMFS Working Paper Series 167, Goethe University Frankfurt, Institute for Monetary and Financial Stability (IMFS).
    6. Lucas A. Mariani & Jose Renato Haas Ornelas & Bernardo Ricca, 2023. "Banks’ Physical Footprint and Financial Technology Adoption," Working Papers Series 576, Central Bank of Brazil, Research Department.
    7. Dirk Niepelt, 2020. "Reserves for All? Central Bank Digital Currency, Deposits, and Their (Non)-Equivalence," International Journal of Central Banking, International Journal of Central Banking, vol. 16(3), pages 211-238, June.
    8. Sébastien Lotz & Françoise Vasselin, 2019. "A New Monetarist Model Of Fiat And E‐Money," Economic Inquiry, Western Economic Association International, vol. 57(1), pages 498-514, January.
    9. Giammatteo, Michele & Iezzi, Stefano & Zizza, Roberta, 2022. "Pecunia olet. Cash usage and the underground economy," Journal of Economic Behavior & Organization, Elsevier, vol. 204(C), pages 107-127.
    10. Zura Kakushadze & Jim Kyung-Soo Liew, 2020. "Coronavirus: Case for Digital Money?," Papers 2005.10154, arXiv.org.
    11. Makoto Saito, 2021. "Central Banknotes and Black Markets: The Case of the Japanese Economy During and Immediately After World War II," Advances in Japanese Business and Economics, in: Strong Money Demand in Financing War and Peace, pages 25-56, Springer.
    12. Agur, Itai & Ari, Anil & Dell’Ariccia, Giovanni, 2022. "Designing central bank digital currencies," Journal of Monetary Economics, Elsevier, vol. 125(C), pages 62-79.
    13. Davoodalhosseini, Seyed Mohammadreza, 2022. "Central bank digital currency and monetary policy," Journal of Economic Dynamics and Control, Elsevier, vol. 142(C).
    14. Gabriel Chodorow-Reich & Gita Gopinath & Prachi Mishra & Abhinav Narayanan, 2020. "Cash and the Economy: Evidence from India’s Demonetization," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(1), pages 57-103.
    15. Charles Bean, 2018. "Central Banking after the Great Recession," Economic Affairs, Wiley Blackwell, vol. 38(1), pages 2-15, February.
    16. Angrick, Stefan & Nemoto, Naoko, 2017. "Central Banking below Zero: The Implementation of Negative Interest Rate Policies in Europe and Japan," ADBI Working Papers 740, Asian Development Bank Institute.
    17. Jean-Pierre Danthine, 2017. "Taux négatifs: made for Switzerland," Working Papers hal-01884328, HAL.
    18. MD Gyasuddin Ansari & Rudra Sensarma, 2023. "Monetary Policy, Liquidity Shock and Bank lending: The Case of Currency Demonetization in India," Working papers 575, Indian Institute of Management Kozhikode.
    19. Carmen M. Reinhart & Franziska L. Ohnsorge & Kenneth S. Rogoff & M. Ayhan Kose, 2022. "The Aftermath of Debt Surges," Annual Review of Economics, Annual Reviews, vol. 14(1), pages 637-663, August.
    20. Dominika Kolcunova & Tomas Havranek, 2018. "Estimating the Effective Lower Bound on the Czech National Bank’s Policy Rate," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 68(6), pages 550-577, December.

    More about this item

    Keywords

    Bank of Israel; Cash Cap; Digital Shekel; Financial Inclusion; Locker Agreement; Privacy Budget; Shadow Economy; Retail CBDC;
    All these keywords.

    JEL classification:

    • M00 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mgs:ijmsba:v:8:y:2022:i:6:p:37-43. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bojan Obrenovic (email available below). General contact details of provider: https://researchleap.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.