Bank of Israel: Digital Currencies Are Not a Currency

The Central Bank of Israel recently came up with a statement, describing the Digital currencies to be as assets for the investors, merely than the usual currencies. In the opinion of the top officials of the bank, Crypto currencies are more of a virtual currency and one should not confuse it as the usual currencies or the foreign exchanges.

What is the standing of the Bank in this regard?

Describing the notion that the Bank holds about digital currencies and the ecosystem of the Cryoptocurrency trading, Bank officials made it very clear that the Bank is considering Bitcoins and other forms of digital currencies as financial assets for the investor and it is not in line with the Bank’s definition of the usual currency notes.

Bank officials added that investors should be skeptical about the open-trading format of these virtual currencies as it is free of the supervision of any central, parenting authority. In the opinion of the bank, this adds more volatility to the trading system and investors are vulnerable to the chances of experiencing a stiff drop in the value of its price.

Narrating on the aspects of the risks and threats associated with this trading format, one of the key bank official stated that the anonymous nature of these currencies paves the possibilities of money laundering attempts as well as other gross financial crimes. Hence, it turns to the responsibilities of the banks to come up with adequate measures for combating the chances for fraudulent activities with digital currencies.

How the Bank is trying to address the issue of volatility with the Digital currency trading?

Acting what the Banks preached, it has already formed a special team, designated to supervise such risks and threats. However, bank officials admitted the point that digital currencies are offering challenges to the authorities for designing rules and regulations for controlling the activities with such resources.

The aforesaid statement from the bank came at a highly relevant time with the Israel Securities Authority stating that it is planning to prohibit any companies with major involvement with the Bitcoins from the stock exchange at Tel Aviv.

The statement from the central bank has already triggered a sensation among the digital currency investors and it is obvious that it is going to have its own impact on the trading of crypto currencies at the forthcoming time. However, it is only for the time to have the final say in this regard.

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