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The Israeli "economic tsar", Avi Simhon, has denounced Bitcoin (BTC) as inherently ineffective, predicting that cryptocurrency would disappear as well.
A Cointelegraph correspondent announced that Simhon – the head of the National Economic Council and senior economic adviser to the country's prime minister – delivered a speech at the Israel Bitcoin Summit held at Tel Aviv University on 8 January.
Simhon argued that issuing Bitcoins nationally or globally would cost "billions of dollars in real energy costs," as opposed to the current situation in which printing fiat money costs very little. This, he said, prevents invention from being used as money.
Noting that legislatures around the world have debated the desirability of classifying Bitcoin as an asset or currency, he asserted that its inefficiency as a currency made it a categorical speculative asset, as decided the Israeli tax authorities in February 2018.
While being extremely skeptical about Bitcoin, Simhon nevertheless deepened the hypothesis that some form of digital currency issuance might be acceptable to national governments.
He suggested that some governments may be willing to forego the benefits they receive from virtually no-fee currency issuance if the transition to digital currencies is found to be more efficient overall for the banking system.
This decision, he said, would be "made for the good of all", stemming from the recognition by States of the widespread economic benefits that digital money could bring.
"I'm still convinced that the money, as we know it, will change," he said, while stating that this transition to digital currencies would not be due to the decentralized and anonymous peer-to -peer of Bitcoin, but rather to a digital currency backed by a central bank (CBDC).
Simhon noted that the Bank of Israel, the country's central bank, had been studying the possibility of continuing the issuance of digital shekels – Israel's national fiat currency – and had decided not to issue it. Acknowledging that he was "not sure whether it was a good decision", Simhon also asserted that a good argument in favor of the central bank's rejection was mainly that no other country has it. had done again.
In this regard, the economist argued that, if successful, the current pilot project for digital money in Switzerland would be a turning point for the potential transition and adoption of CBDCs around the world.
Finally, Simhon predicted that governments would remain firmly opposed to anonymous digital currencies, citing concerns about their involvement in the potential financing of terrorism.
As reported last November, Christine Lagarde, Managing Director of the International Monetary Fund (IMF), urged the international community to "consider" supporting the digital currencies issued by central banks, while remaining skeptical about cryptocurrencies and assets not guaranteed by governments.
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