The COTI Foundation has partnered with industry giants, such as PayPal and Fireblocks, on Israel’s CBDC called the Digital Shekel. This partnership is a major development for COTI, a Layer-2 scaling solution, as it moves forward in the CBDC space.
COTI revealed this partnership on X and pointed out that its privacy-focused L2 blockchain will offer advanced features to hold and transfer CBDCs securely. COTI is the only blockchain selected by the Bank of Israel for this purpose.
The CBDCs are being considered by many countries across the globe and those which are not currently involved in active development of such currency are expected to join the process soon. This expansion will further the need for reliable and large-scale blockchain solutions.
COTI wants to dominate this emerging market by concentrating on superior functionalities and creating a community around the Digital Shekel. The network will rely on the considerations in the design aspect and employ the garbled circuits to ensure that the users’ privacy and confidentiality are maintained.
The Bank of Israel has been considering CBDCs for the last six years. This decision indicates a fairly high level of advancement, as it opted for COTI. The Bank of Israel Steering Committee presented a plan for issuing a central bank digital currency, SHAKED in April 2023.
The committee identified decreasing cash and cash equivalents, the increasing use of stablecoins, competition in the domestic payment system, and technological advancements in payment systems as the key factors that may lead to the issuance of the digital shekel.
The Bank of Israel also partnered with the HKMA and the BISIH on Project Sela, a retail CBDC system that focuses on privacy and cybersecurity. This could be attributed to the effectiveness of Project Sela in the bank’s operations and its renewed focus on its CBDC.
COTI’s participation in the Digital Shekel project in Israel demonstrates how it can revolutionize the digital currency market using its sophisticated blockchain capabilities.
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