Deputy Governor, Central Bank of Israel: Encrypted currency belongs to assets, not currency

nBankruptcy: Israel’s central bank’s deputy governor at a meeting recently made a public comment on cryptocurrencies, saying the new thing is a financial asset, not a currency. The remarks undoubtedly represent, to some extent, the attitude of the Bank of Israel on cryptocurrencies. She also stressed the risk of investing in cryptocurrencies, in line with the opinions of other central banks. At the same time, she acknowledges that there are some difficulties in regulating cryptocurrencies.n
nTranslation: Inan
The Israeli Central Bank said cryptocurrencies, such as bitcoin, are an asset, not a currency.n
Nadine Baudot-Trajtenberg, deputy governor of the Bank of Israel, made a statement on January 8 at a meeting of the Parliamentary Finance Committee, saying:n
n”Bitcoin and similar virtual currencies are not currencies and can not be considered as foreign exchange.”n
nShe described the Israeli central bank’s position in the cryptocurrency ecosystem as saying that digital currency should be considered a “financial asset” and that Bitcoin does not meet the central bank’s legal definition of currency.n
Baudot-Trajtenberg also warned that cryptocurrencies such as bitcoin are not backed by official agencies such as the central bank or the government, and investors and users should be aware of the risks, such as extreme volatility that could cause the value to plummet.n
She also pointed out that cryptocurrency is also at risk of compliance as the anonymity of the virtual currency could lead to its potential use for money laundering and financial crimes. She said banks need to take the necessary steps to combat fraudulent activities involving cryptocurrencies.n
It is reported that the Bank of Israel’s bank regulatory authorities have set up an internal team to investigate this risk.n
However, authorities also face some problems when planning to monitor cryptocurrency technology. Baudot-Trajtenberg said:n
n”We think it is a real challenge to issue comprehensive guidance on this system and to take proper measures to judge, manage and monitor the risks in such activities.”n
nA month ago, the Securities and Exchange Commission (ISA) said it wanted to ban major participants in the Bitcoin transaction from trading on the Tel Aviv Stock Exchange.n
In the past few months, as the price of cryptocurrencies has hit a record high, central banks and financial regulators in many countries have issued relevant warnings. Some countries, including Britain, India and Russia, have recently sounded the alarm over the risk of investing in bitcoin.n

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