Nadine Baudot-Trajtenberg, the deputy governor of the Bank of Israel, has said that in the bank\'s view, cryptocurrencies such as bitcoin, ethereum, and ZDR are more an asset rather than a currency. Speaking on 8th January, at a meeting of the Knesset Finance Committee, Baudot-Trajtenberg said,

\"Bitcoin and similar virtual currencies are not a currency, and are not considered foreign currency.\"

She went on to say that cryptocurrencies should be viewed as a \"financial asset\" rather than a digital currency. Baudot-Trajtenberg was also keen to point out the fact that bitcoin doesn’t fit the Bank of Israel’s legal definition of currency.

The deputy governor went on to warn that cryptocurrencies do not have the backing of governments or central banks and that anyone investing in or using these products should be aware of the level of risk created by high levels of volatility.

Baudot-Trajtenberg also warned that the pseudo-anonymous nature of cryptocurrency transactions means that there is a risk they will be used to carry out money laundering and other financial crimes. In response to this threat, the Bank of Israel has created a team which will assess the risk posed by the use of cryptocurrencies.