An asset, not a currency.
So declared Israel’s central bank, which said Monday, as reported by Reuters, that it would not view cryptocurrencies — bitcoin among them, of course — as a reputable form of currency.
Echoing other governments globally, the central bank said that risk abounds for financial institutions and those that do business with them.
Appearing before the country’s parliamentary finance committee, Deputy Governor Nadine Baudot-Trajtenberg stated that cryptos should be “viewed as a financial asset,” and that the government holds no responsibility for investors of digital currencies. As has been seen elsewhere in the world (in the U.K. and beyond), Israel’s central bank is studying cryptos, and yet there are no real signposts pointing the ways in which to deal with them.
Bitcoin is the more famous of cryptos, which now number more than 1,000. In an example of volatility, the price of a single bitcoin hit its zenith of more than $19,000 last month and now trades at roughly $15,300.
Said Baudot-Trajtenberg, “there is a real difficulty in issuing sweeping guidelines to the system regarding the proper way to estimate, manage and monitor the risks inherent in such activity. Beyond the risks to the customer, there are also compliance risks to the bank … the anonymous nature of virtual currencies leads to the possibility that they may be used to launder money, finance crime and so forth.”
Elsewhere during the committee meeting, there was commentary by Moshe Gafni, the panel chairman, that cryptos “will become central to our financial lives.”
The panel meeting came after regulators in Israel offered up proposals that would keep companies from trading on the main stock exchange if their focus was with cryptocurrencies.