Cryptocurrencies in Israel

The article dwells upon specific features of Israel’s cryptocurrency market. The author examines the use of bitcoin and blockhain technology. The research also presents basic characteristics of cryptocurrencies, worked out in whole or in part by Israeli creators, such as Isracoin and Zcash. The first one was conceived mainly as an internal Israeli form of digital currency and initially was distributed among citizens and companies registered in Israel. It was assumed that the new technology will interest even the ultra-orthodox sector receiving donations from abroad. The second was a joint project of American and Israeli scientists, and the main feature of this coin was the increased secrecy of transactions.

The article also gives a brief description of the Israeli state policy that complicated the usage of digital currencies. The fears of the government concerned risks of bankruptcy of the citizens and the likelihood of the active use of cryptocurrencies in corruption and illicit economy. Finally the article describes the possibility of using cryptocurrency to transfer funds to terrorist organizations and regimes hostile to Israel. The author concludes that so far the amount of such transactions is significantly lower than fundraising with the involvement of more common forms of payment but Israel pays attention to this problem in order to show the additional danger of the threats directed against it, as well as to declare that the «Islamic State» (prohibited in Russia) continues its activity. This is important in order to persuade the US to maintain its presence in the region.

Keywords

Israel, cryptocurrency, bitcoin, blockchain, financing of terrorism

Publication date

27.06.2020

Number of characters

28622

Cite

GOST	Iakimova E. Cryptocurrencies in Israel // Asia and Africa Today – 2020. – Issue 6 C. 52-59 [Electronic resource]. URL: https://asaf-today.ru/S032150750009878-7-1 (circulation date: 24.04.2025). DOI: 10.31857/S032150750009878-7
MLA	Iakimova, Elizaveta A. "Cryptocurrencies in Israel." Asia and Africa Today 6 (2020):52-59. DOI: 10.31857/S032150750009878-7
APA	Iakimova E. (2020). Cryptocurrencies in Israel. Asia and Africa Today (6), pp.52-59 DOI: 10.31857/S032150750009878-7

100 rub.

When subscribing to an article or issue, the user can download PDF, evaluate the publication or contact the author. Need to register.

Number of purchasers: 0, views: 1746

Readers community rating: votes 0

1. Crypto regulation in Israel. Benefit daily. 28.09.2018. https://benefit-daily.com/post/crypto-regulation-in-israel (accessed 02.03.2020)

2. Sales B. Bitcoin makes alyah: cryptocurrency finds Israel fans. Jewish Telegraphic Agency. 12.06.2014. https://www.jta.org/2014/06/12/israel/bitcoin-makes-alyah-cryptocurrency-finds-israel-fans-2 (accessed 02.03.2020)

3. Aviv E. The forking of the Israeli Bitcoin community group, and why should you care. Altcoin Magazine. 18.11.2018. https://medium.com/the-capital/the-forking-of-the-israeli-bitcoin-community-group-and-why-should-you-care-406baad558f2 (accessed 02.03.2020)

4. Yablonko Y. Ehud Barak: Cryptocurrencies are a Ponzi scheme. Globes. 02.12.2018. https://en.globes.co.il/en/articleehud-barak-cryptocurrencies-are-a-ponzi-scheme-1001263129 (accessed 01.03.2020)

5. Kshetri N. Will blockchain emerge as a tool to break the poverty chain in the Global South? Third World Quarterly. 2017. Vol. 38, № 8, pp. 1710-1732. DOI: 10.1080/01436597.2017.1298438

6. One political voting with the use of blockhain technology. https://hackernoon.com/online-political-voting-with-te-useof-blockchain-technology-55c018514d8e (accessed: 29.02.2020)

7. Winer S. Voting irregularities surface in Likud primaries results. Times of Israel. 10.02.2019. https://www.timesofisrael. com/voting-irregularities-surface-in-likud-primaries-results/ (accessed 29.02.2020)

8. Wass A. Can Dubai become the first blockchain powered city by 2020? CNN. 07.01.2019. https:// www.cnn.com/candubai-become-the-first-blockchain-powered-city-by-2020 (accessed 29.02.2020)

9. Lyon N. First blockchain-powered government to launch in Odessa, Ukraine. Cointelegraph. 06.11.2015. https://cointelegraph.com/news/first-blockchain-powered-government-to-launch-in-odessa-ukraine (accessed 29.02.2020)

10. Zaidise E., Shahrabani S., Gal A., Benzion U. Understanding public support for social protest: testing collective action frames, cognitive liberation and political opportunity in the Israeli 2011 summer protest. Israel Affairs. 2018, Vol. 24, № 5, pp. 865-882. DOI: 10.1080/13537121.2018.1505705

11. Hirschauge O. Isracoin begins today: “There are few banks that control most of the assets”. The Marker. 26.03.2014. https://www.themarker.com/technation/1.2279660 (accessed 22.02.2020) (In Heb.)

12. Hirschauge O. Move over bitcoin, make a way for the Isracoin. Haaretz. 27.03.2014. www.haaretz.com/Israelnews/business/.premium-farewall-bitcoin-welcome-isracoin-1.5339459 (accessed 22.02.2020)

13. Isracoin airdrop phase-I. https://bitcointalk.org/index.php?topic=529409.msg6561798 (accessed 28.02.2020)

14. Isracoin phase-II Staggered release model. https://bitcointalk.org/index.php?topic=529409.msg7110649#msg7110649 (accessed 28.02.2020)

15. Israel’s virtual currency Isracoin is officially launched today. https://www.telecomnews.co.il/?????-??????????-???????-Isracoin-???-????-????.html (accessed 28.02.2020) (In Heb.)

16. Avni H. After Bitcoin: meet the first Israeli digital currency. Kikar ha-Shabbat. 10.06.2014. https://www.kikar.co.il/abroad/äëéøå-àú-äîèáò-äãéâéèìé-äéùøàìé.html (accessed 28.02.2020) (In Heb.)

17. Zhidkova LY. Prospects for Cryptocurrency in the economy of Israel. Institute of Middle East Studies. M. (In Russ). http://www.iimes.ru/?p=40366 (accessed: 29.02.2020) (In Russ.)

18. Ben Zion I. Skeptical welcome for the new Israeli digital currency. Times of Israel. 27.03.2014. www.timesofisrael.com/skeptical-welcome-for-new-israelo-cryptocurrency/ (accessed 02.03.2020)

19. Starkman R., Boksbaum N. Eli Ben-Sasson, Technion professor created a digital coin and thinks that Bitcoin is ingenious. The Marker. 13.04.2018. https://www.themarker.com/markerweek/1.5993734 (accessed 28.02.2020) (In Heb.)

20. Dovbnya A. Zcash Price analysis – how much will ZEC cost in 2019-20-25? https://www.u.today/zcash-priceprediction-how-much-will-zec-cost-in-2019-20-25 (accessed 18.02.2020)

21. Rick D. Why Edward Snowden likes Zcash despite the controversial founder’s reward. News BTC. 05.02.2019. https://www.newsbtc.com/2019/02/05/snowden-zcash-founders-reward/ (accessed 18.02.2020)

22. Peterson P., Wilcox Z. Zcash in Brazil and South Africa. https://electriccoin.co/blog/zcash-in-brazil-and-south-africa/ (accessed 23.02.2020)

23. Kim E. Coinbase slammed for Venezuela Zcash airdrop being an “advertising strategy”. www.bitcoinist.com/coinbasezcasch-airdrop-venezuela/ (accessed 23.02.2020)

24. Carrick J. Bitcoin as a complement to emerging market currencies. Emerging Markets Finance and Trade. 2016. Vol. 52, № 10, pp. 2321-2334. DOI: 10.1080/1540496X.2016.1193002

25. Hayek F.A. Denationalisation of money: the argument refined. An analysis of the theory and Practice of Current Currencies. London, The Institute of Economic Affairs, 1990.

26. Dallyn S. Cryptocurrencies as market singularities: the strange case of Bitcoin. Journal of Cultural Economy. 2017. Vol. 10, № 5, pp. 462-473. DOI: 10.1080/17530350.2017.1315541

27. Notice to the public regarding possible risks in decentralized virtual currencies (such as Bitcoin). Bank of Israel, 19.02.2014. https://www.boi.org.il/en/NewsAndPublications/PressReleases/Pages/19-02-2014-BitCoin.aspx. (accessed 23.02.2020)

28. Public consultation on the establishment of an infrastructure for immediate payment in Israel. Bank of Israel, 15.11.2017. https://www.boi.org.il/en/NewsAndPublications/PressReleases/pages/15-11-17.aspx (accessed 28.02.2020)

29. Scheer S. Israel Central Bank mulls issuing digital currency for faster payments. Reuters, 24.12.2017. https://reuters. com/article/us-israel-cenbank-currency/israel-central-bank-mulls-issuing-digital-currency-for-faster-paymentsidUSKBN1EI0D5 (accessed 01.03.2020)

30. The Bank of Israel publishes summary of the work of the team to examine Central Bank digital currency. Bank of Israel, 06.11.2018. https://www.boi.org.il/en/NewsAndPublications/PressReleases/Pages/6-11-18.aspx (accessed 28.02.2020)

31. Even S. Internet currencies and national security. Institute for National Security Studies. INSS Insight, 2017, № 1003. https://www.inss.org.il/publication/internet-currencies-national-security/ (accessed 01.03.2020).

32. HAMAS and the Popular resistance committees called on their supporters to donate money using the virtual currency Bitcoin. The Meir Amit Intelligence and Terrorism Information Center, 03.02.2019. https://www.terrorisminfo.org.il/en/hamas-popular-resistance-committees-called-supporters-donate-money-using-virtual-currency-bitcoin/ (accessed 28.02.2020)

33. Has ISIS been defeated? Overview and possible developments after the fall of ISIS’s enclave in the lower Euphrates valley. The Meir Amit Intelligence and Terrorism Information Center, 25.03.2019. https://www.terrorism-info.org.il/en/isisdefeated-overview-possible-developments-fall-isiss-enclave-lower-euphrates-valley/ (accessed: 28.02.2020)

34. Weimann G. Going Dark: Terrorism on the Dark Web. Studies in Conflict & Terrorism. 2016. Vol. 39, № 3, pp. 195-206. DOI: 10.1080/1057610X.2015.1119546

35. Whyte C. Cryptoterrorism: assessing the utility of blockchain technologies for terrorist enterprise // Studies in Conflict & Terrorism, 2019, pp. 1-24. DOI: 10.1080/1057610X.2018.1531565

36. Keatinge T., Keen F. Social media and (counter) terrorist finance: a fund-raising and disruption tool. Studies in Conflict & Terrorism, 2019. Vol. 42,