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 that Israeli banks were making it difficult for some customers to transfer funds from their accounts to buy bitcoins. But she said this was something the central bank would not be able to address, and other central banks were facing the same problem.Further citing possible compliance risks for banks, she continued to say that the anonymous nature of virtual currencies leads to the possibility of their use in money laundering and financial crimes. Banks, she said, need to take necessary measures to combat fraudulent activities involving cryptocurrencies. The Bank of Israel‘s banking supervision department has formed an internal team to look into such risks, the statement indicates.
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