Bank of Israel Deputy Governor: Cryptocurrency Can Assist the Monetary System

Dr. Nadine Bodo-Trachtenberg spoke at a conference organised by the Israeli cryptocurrency exchange Bit2c

Finance Magnates attended the ‘Bit2c Crypto Conference’ in Ramat Gan today. Speaking at the conference were a number of figures from the cryptocurrency industry, as well as Dr. Nadine Bodo-Trachtenberg, Deputy Governor of the Bank of Israel, and Knesset member Sharren Haskel.

Bit2c team

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More control over data? Not necessarily 

Dr. Bodo-Trachtenberg presented the Bank of Israel’s stand on cryptocurrency: “The technology of distributed and encrypted currencies has the potential to contribute to the monetary and financial system in the long term. You have to see what you allow and where you turn down your enthusiasm.

I am told that digital coins can leave users with control over data and allow decentralization. But that’s what they promised about the internet – which ultimately created huge information giants that hurt competition. Token trading and smart contracts is a technology that expands the possibilities of money and trading in assets today, can streamline processes that pass through many intermediaries.”

Alon Muroch, CEO of Blox, spoke about his company at the conference. Blox is a company that offers portfolio tracking and blockchain asset management. It also allows users to synchronise their cryptocurrency wallets and exchanges into a single account.

He said that Solidity, the programming language developed by a team from Ethereum, is the code that bought blockchain technology from a little-known idea before 2017 to something which is almost mainstream.

Adv. Guy Lachmann, a partner at law firm Pearl Cohen Zedek Latzer Baratz talked about blockchain regulation in Israel. He said that regulation exists on a spectrum. Heavy regulation is required for initial coin offerings and token generation events, sustainable regulation is required for cryptocurrency exchanges, while for pure blockchain technology no regulation is necessary.

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He said that from October 2018, Israeli law will include digital currency in its official definition of examples of financial assets (joining cash, cheques, financial derivatives, etc). Related services such as exchanges of financial assets and asset storage will also be affected by this change.

Meirav Harel, a fintech specialist, and the former COO of Bancor, gave a speech in which she asked an important question – if banks stop being our primary source of monetary services, would the tech companies that replace them be any better? Would they be able to hold enough reserves? Could they cause the next financial crisis?

Meirav Harel

Liberal regulation on the horizon

Alon Muroch said during a panel discussion that he is not entirely sure that the security record of cryptocurrency is any less good than that of banks, where there has been and is a lot of crime. However, there does exist a trade-off between security and privacy.

Finally, Sharren Haskel, member of the Knesset, spoke about economic freedom and individual rights.

She said that the government is working on cryptocurrency regulation. The problem is that it is such a brand new world that many people do not understand it, which is why they are consulting heavily with outside experts.

Haskel said that Dr. Hadar Jabotinsky, a professor of law at the Hebrew University of Jerusalem who specialises in financial regulation and is known for her liberal economic views, who is coincidentally a personal friend of hers, wrote a paper on the subject which is being heavily referred to by the government.

Sharren Haskel

Bit2c is an Israeli cryptocurrency exchange which offers trading with Bitcoin, Ethereum, Bitcoin Cash, Litecoin, Ethereum Classic and Bitcoin Gold and has daily volumes of $118,636, according to coinmarketcap.com.

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