… but proposes to prohibit the trading of shares from cryptocurrency companies.
Israel could turn to cryptocurrencies to speed up its payment system.
A Reuters article said this week that the Bank of Israel is studying the use of cryptocurrency. The goal? Reduce the cash dependence of the economy and introduce faster payment capabilities in the country. The publication cited an anonymous source of the bank. In addition, she added that no plan has been finalized for this project. However, if the central bank approves, the government could include the plan in its budget as early as 2019.
“Central banks around the world are examining [the use of cryptocurrencies ] so we should do the same,” the source said.
The country could centralize cryptocurrency and ensure that it is covered by anti-money laundering (AML) and other regulations. The Bank of Israel refused to comment on this.
While Israel seeks to reduce cash dependence, the government is also exploring a faster payment structure similar to those in other markets such as the EU or the US. In November, the Bank of Israel issued a consultation paper. The latter is looking for public proposals for a faster payment infrastructure that supports real-time payments.
A contradictory position
While the country’s central bank could see the benefits of cryptocurrency, the Tel Aviv Stock Exchange (ISA) could ban companies from using bitcoins and other cryptocurrencies. ISA President Shmuel Hauser said he would include the idea for the next meeting of the ISA committee next week. If it finds support, a public hearing will follow, and the by-laws concerning exchanges will have to be changed.
“If there is a company whose main business is in the field of cryptocurrencies, we will not allow it,” Hauser said. “If it is already listed, its transactions will be suspended. We feel that the course of bitcoin behaves like a bubble. We do not want investors to be subject to this volatility and uncertainty. It’s important to tell the market where things are … investors should know where we stand. ”
However, Israel should ban trading on the Tel Aviv Stock Exchange to companies whose core business is bitcoin and other cryptocurrencies, according to the Israel Securities Authority (ISA), the country’s market regulator.
The regulator has proposed an amendment to the exchange rules that would prohibit the listing of shares from companies that invest, own or otherwise minute cryptocurrencies. Such companies would also not be allowed in the exchange indices. If they are already there, they will be deleted.
The ban would not apply to companies with capital of more than 100 million shekels ($ 29 million) and three years of audited financial statements.
The amendment has been approved by the ISA Committee and must be published. Indeed, the proposal for the amendment came after a sharp rise in shares Blockchain Mining (BLCM.TA), a company that said it would transfer its objectives of gold mining and iron mining crypto-currencies.
The reasons for such a decision
“This phenomenon, if it continues, could have serious consequences in the future on … the impartiality of stock market trading in general and on investor confidence in the stock market,” said the ISA.
Stock prices of companies operating in this sector are cut off from their true value, said the ISA. “The market is treating their actions irrationally and unexpectedly.”
Last month, ISA Past President Shmuel Hauser said he had plans to bring such a proposal, saying the bitcoin price behaved like a bubble.
The value of a bitcoin, the cryptocurrency the largest and best known, has jumped in mid-December to nearly $ 20,000, then dropped to less than $ 12 000 at the end of the month. It is trading today around $ 14,500.
The bitcoin is a publicly available register containing a finite number of “tokens” digital, which can be used by their sponsors as a currency without the support of the national central bank. It is “undermined” by computers, which receive new tokens as a reward for solving complex mathematical formulas. Several other crypto-currencies have also been launched and operate on similar principles.