In a joint statement released Wednesday by the Bank of Israel and the Israeli Ministry of Finance, the institutions warned the public of the risks surround decentralized digital currencies the likes of bitcoin.
The public advisory follows a slew of other warnings dished out by a number of central banks around the world.
The warnings are essentially the same we’ve seen in similar announcements, with the institutions warning that digital currency is not legal tender, not issued by the Israeli central bank, and certainly not backed by the central bank.
As such, there is not obligation or requirement for a merchant to accept them.
The institutions also warned of the potential for money laundering and crime financing due to their anonymous nature. Financial institutions have been asked to take this into account in their frameworks, which includes reporting those suspected of wrongdoing to the Israel Money Laundering and Terror Financing Prohibition Authority.
Both the central bank and Ministry of finance included the potential of digital currency being used as a ponzi scheme and lack of regulation and supervision, as well. High volatility and the potential for one to be “hacked” of their bitcoins were also listed perils.
At this point, it’s becoming almost customary for central banks to make announcements of this nature. You can see a variety of nations’ opinions on bitcoin here. [via Globes]
