Israeli prime minister is mulling bitcoin regulation to protect markets

Last month, the Bank of Israel issued a standard statement on bitcoin: it’s risky, it’s volatile, it’s unsafe and it’s not government-issued therefore the central bank is not responsible for any loss in digital holdings.

“Virtual currencies are not issued by a central bank, and are not backed by a central bank which guarantees the nominal value of currency,” the Bank of Israel said. “They aren’t legal tender in Israel, and therefore there is no requirement to accept them as payment for any asset or service or as repayment of a financial loan.”

IsraelOn Tuesday, one of the most powerful men in the Middle East, Israeli Prime Minister Benjamin Netanyahu, spoke with the Fox Business Network to discuss the possibility of the nation regulating the digital currency. He confirmed that it is in the infancy stages of regulation, but noted that it would not be moving forward quickly.

Netanyahu explained that the conversion to an electronic system of money is inevitable but cautioned that any such transition needs to be carefully organized and ensure that there are protections in place to guard various parties. The head of state pretty much confirmed that such measures cannot “upset our financial system.”

“How will we manage it with the necessary controls that you need to protect markets, governments, currency flows – that’s not easily resolved,” Netanyahu said. “I think on that one we have to be a bit careful. We’re passing a decision in my government to limit cash transactions.”

The host wanted to confirm one more time about potential rules being applied to bitcoin. Netanyahu stated that “everybody’s going to look at it very carefully and not rush forward.” He then went on to say he was a “free market champion” and that bitcoin regulations may not be imminent or perhaps necessary.