Following in the footsteps of Russia and Dubai, Israel plans to offer a national cryptocurrency – a digital shekel – that would match to the value of physical shekels

According to sources close to the Ministry of Finance, the black market in Israel accounts for about 22% of the gross domestic product of the country. A digital currency, registered with the Israeli government, would make black market transactions less likely.

In addition, according to the source of information, the government is considering legislation that would significantly reduce the amount of physical currency in the economy. For example, a suggestion would be a law against the payment of wages in cash.

However, the process of creating the digital shekel is just beginning. The government proposed the "Economic Arrangements Bill", which, when passed, would create a separate group for the Bank of Israel to consider the creation of the digital shekel.

The failure of the Knesset to pass a law of the same kind two years ago. The pressure for the adoption of digital currency is strong, as indicated by the recent comments of the Israeli Prime Minister.

Colu, a Blockchain wallet application based in Israel, helped the Israeli government pursue a digital currency. Mark Smargon, VP Blockchain Colu tells Cointelegraph: