Bank of Israel considers issuing digital currency for faster payments

Bank of Israel is mulling issuing a digital currency in a bid to create a faster system of payments and as well as reducing the amount of cash in the economy.

The Israeli digital shekel would record every transaction by mobile phone, thereby, making tax evasion more difficult, reported the Jerusalem Post, citing an anonymous financial official as saying.

The Bank of Israel has been examining the likelihood of a state-sponsored currency for several months, but the decision rests on the government if to give it a green signal or not.

The value of digital shekel reportedly will be equal to the value of physical shekel.

Cryptocurrencies allow parties to transact payments directly without a central intermediary, by means of blockchain technology.

The state-sponsored digital currencies are likely to be an attempt to compete with decentralized cryptocurrencies such as bitcoin.

So far, a state-sponsored digital currency doesn't exist anywhere in the world, the report said.
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Cryptocurrency chaos as China cracks down on initial coin offerings

China's move last week to ban initial coin offerings (ICO) has caused chaos among start-ups looking to raise money through the novel fund-raising scheme, prompting halts, about-turns and re-thinks.

China is cracking down on fundraising through launches of token-based digital currencies, targeting ICOs in a market that has ballooned this year in what has been a bonanza for digital currency entrepreneurs.

The boom has fuelled a jump in the value of cryptocurrencies, but raised fears of a potential bubble.

"This is not unlike the dotcom bubble of 2000," said a partner at a venture capital fund in Shanghai, who didn't want to be named because of the issue's sensitivity. "There are a lot of companies raising a lot of money for not very good ideas, and these will eventually be weeded out. But even from the big dotcom bust, you still have gems."

"One of the reasons regulators stepped in was that the ICO fever extended beyond the traditional crypto community. The timing was an attempt to pre-empt this before it goes into a much broader mass market in China," the partner said.

Investors in China contributed up to 2.6 billion yuan ($394 million) worth of cryptocurrencies through ICOs in January-June, according to a state-run media report citing National Committee of Experts on Internet Financial Security Technology data.

Pre-ICO roadshows featuring elaborate standing room-only presentations at 5-star hotels drew a diverse crowd, including grandmothers - a likely tipping point for regulators.

The hype and subsequent crackdown came as China focuses on economic and social stability ahead of next month's congress of the Communist Party, a once-in-five-years event.
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