Israel seems to have joined the rank of countries that are cautious on cryptocurrencies, as it has classified them as an asset not currencies. Deputy Governor of the apex bank, Nadine Baudot-Trajenburg made this known when she appeared before an Israeli parliamentary committee.
She also stated that the bank had yet to issue guidelines regarding them due to an absence of precedence, and a difficulty in assessing the risks involved. The Central Bank deputy governor also expressed concern that thecryptocurrencies could be used for illicit criminal activities.
Israel sits on the fence
While the bank may not have openly dissuaded Israelis from purchasing cryptocurrencies, commercial banks in the country have refused to allow customers transfer funds to buy cryptocurrencies.
Countries across the world have adopted varying postures regarding regulation of cryptocurrencies. While China and South Korea have outrightly banned their citizens from buying them, Russia has embraced the technology, with universities in the country offering courses on blockchain technology. Japan has also embraced cryptocurrencies, as authorities there have approved cryptocurrency exchanges, and the country hosts a large number of mining operations.
Monetary authorities in Nigeria have asked citizens to exercise caution when dealing with crytocurrencies, due to an absence of regulations and control.
Fears are over blown
Though the concerns expressed by Israel’s monetary authorities are valid, they are grossly over blown. Transactions involving cryptocurrencies are quite easy to trace, with the exception of a few anonymous currencies. Transactions also become public, at the point of converting cryptocurrencies to fiat which is government approved money.
Implications of the clampdown
The huge returns made on cryptocurrencies, has lured many individuals into buying them. Israelis may find it difficult to resist. The subtle opposition by the banks, will only encourage Israelis to seek alternative ways to purchase them. Binance, the world’s largest cryptocurrency exchange by volume has suspended opening of new accounts due to overwhelming demand.