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World

REUTERS
January 9, 2018
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Bitcoin is an asset, not a currency: Israel’s central bank

World

REUTERS
January 9, 2018

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JERUSALEM: Israel´s central bank said on Monday it would not recognise virtual currencies such as bitcoin as actual currency and that it was difficult to devise regulations to monitor the risks of such activity to the country´s banks and their clients.

Deputy Governor Nadine Baudot-Trajtenberg said there had been public complaints Israeli banks were making it difficult for some customers to transfer money from their accounts to buy bitcoin. But this was something the central bank would not be able to address. Other central banks faced the same problem.

"The Bank of Israel´s position is that they should be viewed as a financial asset," Baudot-Trajtenberg told a meeting of Israel´s parliamentary finance committee, noting that there was no government responsibility for investors in bitcoin.

The central bank, Baudot-Trajtenberg said, was studying the issue of virtual currency but not much could be learned from what exists globally since no regulator anywhere in the world had issued guidelines to the banking system on how to act in relation to customers’ activity in virtual currencies.

"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," she said. "Beyond the risks to the customer there are also compliance risks to the bank.

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