Officials from the Central Bank of Israel and the Ministry of Finance are considering introducing a crypto currency issued by the state.

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Rumor has it that the Bank of Israel and the country's Ministry of Finance are weighing the possibility of issuing a cryptocurrency backed by the state, according to an anonymous source in the ministry.

While the central bank has been considering the plan for several months, the Knesset, Israel's single-chamber parliament, would have to approve the plan before it could be implemented. The government can review a superficial draft of the monetary instrument as soon as January 2018 arrives.

The digital currency would be centralized and issued at will by a government agency, at any time and in any amount it considered convenient.

The Israelis would use mobile phones to interact with their cryptocurrency wallets, and the unit value of the digital asset would be equivalent to the country's fiduciary money, the shekel.

According to reports, officials who reflected on the movement see it as a means to reduce tax evasion by decreasing the amount of cash in circulation. Although the central bank has not formally commented on the plan, an official of the institution suggested that the issuance of a digital currency backed by the state could be a great help for anti-money laundering efforts.

In line with ongoing attempts to reduce the amount of paper money in Israel's economy to combat the booming black market trade, the nation's government recently sought proposals for an almost instant digital payment system based on blockchain.

The bank official described the cryptocurrency issued by the state as another possible solution to this problem, and opined that "central banks around the world are examining the use of digital currencies, so we should do it too".

In a video posted on Youtube on December 12, Prime Minister Benjamin Netanyahu predicted that banks would eventually disappear once their role as financial intermediaries became redundant, adding that this obsolescence could result from changes in the market triggered by cryptocurrencies. , specifically Bitcoin.

At the end of December, the president of the Israel Securities Authority, Shmuel Hauser, announced that he would propose the idea of ​​prohibiting companies based on cryptocurrencies from trading on the Tel Aviv Stock Exchange to protect investors from "volatility and uncertainty". which has characterized the prices of many digital assets.

Source: ETHNews