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Israel's Central Bank: Bitcoin Is an Asset, Not a Currency

By VOA News & IsraelNationalNews.com

Israel's central bank said on Monday it would not recognize virtual currencies such as bitcoin as actual currency and that it was difficult to devise regulations to monitor the risks of such activity to the country's banks and their clients.

Deputy Governor Nadine Baudot-Trajtenberg said there had been public complaints Israeli banks were making it difficult for some customers to transfer money from their accounts to buy bitcoin. But this was something the central bank would not be able to address. Other central banks faced the same problem.

"The Bank of Israel's position is that they should be viewed as a financial asset," Baudot-Trajtenberg told a meeting of Israel's parliamentary finance committee, noting that there was no government responsibility for investors in bitcoin.

The central bank, Baudot-Trajtenberg said, was studying the issue of virtual currency but not much could be learned from what exists globally since no regulator anywhere in the world had issued guidelines to the banking system on how to act in relation to customers' activity in virtual currencies.

"There is a real difficulty in issuing sweeping guidelines to the system regarding the proper way to estimate, manage, and monitor the risks inherent in such activity," she said. "Beyond the risks to the customer there are also compliance risks to the bank."

The value of a bitcoin, the biggest and best-known cryptocurrency, surged in mid-December to nearly $20,000, then dropped to less than $12,000 at the end of the month. It was trading on Monday around $15,370.

Bitcoin is a publicly available ledger of a finite number of digital "coins," which backers say can be used as a currency without the support of any country's central bank. It is "mined" by computers, which are awarded new coins for working out complex mathematical formulas. Several other cryptocurrencies have been launched that work on similar principles.

Committee members during the meeting on bitcoin and other cryptocurrencies urged Israel's regulators to quickly come up with regulations. "There seems to be a greater possibility that they will become central to our financial lives," said Moshe Gafni, the chairman of the panel. He called on regulators to submit to the committee within a month how they tend to deal with bitcoin and the like.

Still, Israel's regulators are generally opposed to giving credence to virtual currencies since they are based on private initiatives and they do not have the same level of investor confidence as regular currencies. "The anonymous nature of virtual currencies leads to the possibility that they may be used to launder money, finance crime, and so forth," Baudot-Trajenberg said.

Shlomit Wagman, head of Israel's anti-money-laundering authority said a thorough investigation was needed since terrorist organizations use virtual currency platforms.

Last week, Israel's markets regulator proposed regulations that would ban from trading on the Tel Aviv Stock Exchange companies whose main business revolves around bitcoin and other cryptocurrencies.

Egypt's Grand Mufti weighed in on the phenomenon of cryptocurrency, saying that trading in bitcoin is unlawful in accordance with Islamic Sharia law.

The Grand Mufti, Shawki Allam, issued an official fatwa on the subject on Monday, reported the Al-Ahram newspaper. In it, he wrote said that trading such a "virtual currency" was not permissible as it is not considered by legitimate bodies an "acceptable interface of exchange."

Highlighting that bitcoin is not subject to the state's supervising and financial authorities, Allam said his fatwa was issued following consultations with several economy experts. He stressed that both the "currency's risk as well as its high profit potential undermines Egypt's ability to maintain and stabilize its own currency."

Allam said that bitcoin can have a "negative effect on its dealers' legal safety, possibly due to failure to publicly disclose such operations," which he said would lead to an "ease in money laundering and contrabands trade."

Israeli Company Says It Has Developed Tiniest Cherry Tomato

By Israel Hayom

They say bigger is better, but in the succulent world of cherry tomatoes, one Israeli company is going smaller than ever before. The "drop tomato" is about the size of a blueberry and according to the Kedma company in the country's southern Arava Desert, it is the smallest tomato ever cultivated in Israel, perhaps even in the world.

It's a point of pride in a country known for its agricultural innovation, where fruits and vegetables are taken seriously and where several strands of the cherry tomato were first invented. "The idea is that it is comfortable," said Ariel Kidron, a Kedma grower. "You can throw it in a salad; you don't need to cut it. It just explodes in your mouth."

The seed, originally developed in Holland, was modified to match the arid growing conditions in southern Israel. Rami Golan, of the Central and Northern Arava Research and Development center, who accompanied the project, said it was the smallest ever to be grown in Israel – where tomatoes are incredibly popular.

The tiny tomato, smaller than a one-shekel Israeli coin, is offered in red and yellow varieties and will be presented to the public at a three-day international agricultural fair in Israel later this month. Early indications are it could be a big hit.

Shaul Ben Aderet, a well-known Israeli chef who owns three restaurants, including Tel Aviv's Blue Rooster, and received some early samples, says the new strand is packed with flavor and will spawn an infinite number of new recipes. He offered it sizzled in a pan, baked into focaccia bread and as a straight-up snack. "It's very simple, it's clean, it's nice, it's sexy," he said. In a blind taste test alongside two sweets, he said, "they would say the tomato is a candy, that's for sure."


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