Bitcoin May Lead to the Disappearance of Banks: Israeli Prime Minister

Bitcoin’s rapid rise may be linked to the impending obsolescence of banks, according to the Israeli Premier.

While most world governments’ reactions to Bitcoin range from suspicious apprehension to outright hostility, and countless finance industry figures have predicted its impending demise, Israeli Prime Minister Benjamin Netanyahu has a different take on the situation. According to the head of state, it is banks that are set to become obsolete, and Bitcoin just might be the reason why.

In a video posted on YouTube, Netanyahu is seen speaking to journalists at the Knesset, one of whom asks him about Bitcoin. In response, the prime minister hints that there may be a link between the rising popularity of Bitcoin and the diminishing significance and relevance of traditional banks. 

Speaking on the function of banks, Netanyahu points out that their purpose is to act as “middlemen” who “prevent risks” and help “avoid theft” (translation from Hebrew). However, he suggests that they may soon become outdated:

“Is the fate of banks that they will eventually disappear? Yes. The answer is yes. Does it need to happen tomorrow? And do we need to do it through Bitcoin? That’s a question mark.”

While the Israeli prime minister does not delve into details, it may be that Netanyahu is hinting toward the fact that digital currencies underpinned by blockchain technology are trustless and decentralized in nature, providing secure and direct transactions between parties (cutting out the need for middlemen), and ensuring anonymity – all features that the traditional banking system lacks.

Although Netanyahu does not make any concrete statements about the possible role Bitcoin may play in the impending obsolescence of banks, he does state that:

“… the truth is, what I just said is what’s driving Bitcoin upwards.”

In addition, he goes on to predict a correction in Bitcoin’s near future, noting:

“There’s nothing like this, that will continue rising at this rate, it just can’t happen.”

Bitcoin’s rise has been meteoric of late, with the cryptocurrency smashing new records within a matter of days and even hours – Bitcoin started this month at around the $9,000 mark, before going on to hit the $18,000 milestone on December 8. 

While it has since been trading within the $16,000-$17,000 range, Bitcoin’s sudden and unprecedented rise has triggered concern among governments, central banks and financial regulators.

Israel initially adopted a hostile stance on cryptocurrencies and initial coin offerings (ICOs), with the Israeli Securities Authority (ISA) chairman Shmuel Hauser having expressed concern about “cases of manipulations and scams in trading that hurt innocent investors and entrepreneurs”. However, he has since gone on to soften his stance, even suggesting that Israel needs to put some “daring” regulations in place which can help it become a cryptocurrency and ICO hub. At any rate, it seems there is no possibility of a crackdown on cryptocurrencies in Israel, for now.