Israel which so far has been waiting the US and other countries while taking any decision on Bitcoin, has now decided that it will be mulling a plan to regulate the digital currency. The government has issued warning to its citizens regarding the digital currency which has been criticized for being a decentralized virtual currency.
It is quite disappointing for some Bitcoin enthusiasts as they consider that Israel, a home to pioneering firms in hi-tech fields such as cryptography, could have treated the new invention well. Particularly, when Israel is being seen as a country that gives impetus to new technologies and entrepreneurship, behaving like China, it generates concern among Bitcoiners.
Nonetheless, the central bank governor Karnit Flug convened a meeting with other regulators, including those for capital markets, taxes, securities and money laundering and terror financing, etc. to discuss Bitcoin and other similar digital currencies. They reached to the conclusion that Bitcoin can definitely be used in financing terror and avoid taxes.
The government says that in the convened meeting members pondered upon various aspects of the digital currency and agreed to continue to examine various perspectives related to the use of, and trade in, virtual currencies including of Bitcoin. Also, perspectives such as possible macro effects, their legal standing, their regulation, etc. were discussed.
Government considers Bitcoin is being used for Money Laundering and Tax Fraud
The participating members also discussed about the role of Bitcoin and other digital currencies in money laundering and terror financing risks in consequence. Bitcoin may also generate issues regarding taxation and consumer protection and according to the government officials, it should be discouraged.
Bitcoin which has always been a contentious topic for supporters and detractors is gaining new kind of popularity among people who think that a decentralized platform helps it remain outside of the purview of the government intervention and thus, it cannot be manipulated. However, the detractors who view Bitcoin as a bubble say that it won’t last long.
The government of Israel thinks that the public should be aware that Bitcoin is unsupervised, is not legal tender and presents fertile ground for fraudulent activities. According to the sources in the government as Bitcoin transactions are anonymous and often hard to trace, there is a lot of trouble to curb money laundering and tax frauds.
The government believes that anonymity is liable to be exploited for criminal activity, including money laundering, financing illegal activities and financing terrorism and therefore, it should act and shut the operations that are encouraging it.
To contact the reporter of this story: Deepak Tiwari at firstname.lastname@example.org