Is Israel destined to become the new hub for cryptocurrency?

Israel is ever more a home to a strong technological sector. As home to Argus Cyber Security (the automotive security service), Arbe Robotics (helping autonomous vehicles avoid objects) and Secret Double Octopus, who are revolutionising the way we work with password authentication. Israeli bio-tech company Bonus BioGroup also recently were successful in growing human bones in a lab environment, with the aim to provide “spare parts” for humans, without the need for human donors.

From Waze, to Facetune and Enlight, it’s likely you even use some Israeli produced apps on your smartphone in day to day life.

With all this development people are taking notice! 2012 saw the acquisition of Waze by Google for over $1 billion dollars, 2013 saw Cisco take over mobile phone software firm Intucell for $475 million and the sale of security software firm Trusteer to IBM for $1 billion dollars.

These great technological strides are seeing the “start up nation” placed at the centre of the global financial technological revolution with cryptocurrency.

In December 2017, Israeli Prime Minister Benjamin Netanyahu appeared online in a viral video in which he forecast that the current global financial banking system was destined to become obsolete. He predicted that the current financial system would be upended, in which blockchain technologies, such as Bitcoin and other cryptocurrencies, would play a role.

Time will only tell if a single coin will dominate in the future, but his comments were met positively by other experts in the sector. Chief marketing officer of the Swiss Israeli technology firm Sirin Labs was also quoted as telling JNS.org “It is overwhelming to watch the ‘start-up nation’ transform into the ‘crypto nation.’”

In the former portion of December 2017, one of the toughest financial regulators in Israel was seen to be making positive comments on the move, revealing they were looking to further investigate into the provision of a regulatory framework to welcome Bitcoin and other cryptocurrencies into their financial economy.

While the future relationship between the Israeli economical and technological sector and the Bitcoin and cryptocurrency future seemed to be heading in an ever more positive direction, this has since taken a turn for the worse. Within the final days of 2017 Israeli authorities became the latest national regulators to make a crack down on cryptocurrencies. They announced they would bar companies that traded in Bitcoin from operating on the Tel Aviv stock exchange.

China, who initially seemed pro cryptocurrency and behind Israel in the crypto-rush, have now since shut down Bitcoin miners through fears of connections with money laundering and fraud with the currency. As a likely result of these events, Bitcoin has seen a hefty slump in value in the former weeks of 2018, which will likely further lessen the appeal for the uptake of such currencies by the Israeli economy. But then the price rose again, showing the volatility of this new currency.

As technology progresses into the future it seems inevitable that crypto-currency will become integrated into these advancements, however it seems that further headway needs to be made with dissociating the technology from money laundering and malicious intent before it can be accepted by world economies without fear of risk.