Israel’s government has been hard at work discussing whether or not to launch a cryptocurrency based on the country’s own legal tender, the shekel. An official from the Finance Ministry of Israel said that both the Ministry and the country’s central bank are considering launching a cryptocurrency in a conversation with the Jerusalem Post.
The Finance Ministry and Bank of Israel are seriously considering launching a “crypto-shekel” as a possible response to the rise in Bitcoin trading inside of the country.
According to an anonymous source within the Ministry that spoke to The Jerusalem Post, the cryptocurrency will record all transactions on users’ mobile phones, making the process of tax evasion more difficult.
The official said:
“You can imagine that instead of giving you a piece of paper saying the Bank of Israel on it, I can send you a piece of digital code that was issued by a central bank.There’s a lot that people need to think about before going through with this reform. We’re looking at the legal, financial, regulatory and money- laundering sides of this,”
In other words, transactions would be much faster, since they do not have to run through multiple organizations in order to complete. These “digital cash transfers” would essentially be peer-to-peer transactions.
According to The Jerusalem Post’s report, the value of the crypto-shekel will be tied to the shekel.
This decision would be in contrast to most cryptocurrencies (except for Tether), which act as free-floating currencies whose circulation is determined by algorithms.
Earlier this year, Russian ministries were talking about doing exactly the same thing.
Russian Communications Minister Nikolai Nikiforov said:
“I confidently declare that we run CryptoRuble for one simple reason: if we do not, then after 2 months our neighbors in the EurAsEC will,”
Unlike the Russian government, Israeli’s ministry and central bank do not see cryptocurrencies as a direct threat, but wish to create the crypto-shekel to compete with the decentralized markets.