The Israeli government is considering a new law that will substantially reduce the amount of cash needed to keep its economy going, which envisages the creation of a digital shekel that has the same value as its current currency (1 shekel = $0.29).

In an article for a local newspaper, the interest of the Central Bank of Israel in creating digital coins to reduce the circulation of cash is noted and cites an extensive study published in September this year by the Swedish central bank on the possibility of creating the e-krona with the same value as the Swedish krona.

Although we are not talking about a new cryptocurrency but a digital shekel, it is clear that transfers and payments with the new currency would be made directly between two citizens, without the intervention of third parties; in contrast to conventional transfers and payments that must be made through banking institutions.

Electronic money movements require banks to act as intermediaries, while cash flows from the buyer's wallet to the seller's cash register without bank control. This peer-to-peer transaction is very similar to the exchange of digital coins, except that what changes hands is a code that signals the passage of money from one virtual purse to another.

Two weeks ago, Israeli Prime Minister Benjamin Netanyahu declared that the banks' operation could become obsolete vis-à-vis bitcoin because of its remarkable growth in the year.

Faced with Netanyahu's favourable views on bitcoin and the finance ministry's initiatives to create digital currencies, the financial market regulator in Israel yesterday offered a totally opposite view. The President of the Israel Securities Authority (ISA), Shmuel Hauser, announced on 25 December that he will propose legislation to prevent companies based on cryptocurrencies from trading on the Israeli stock exchange (TASE).

If we have the request to enter TASE from a company whose primary business is digital coins, we will not allow it. If she's already trading in the stock market, she'll be suspended." It was Hauser's words referring to his proposal, which will be presented next week to the board of that organization. If approved, it will be subject to public consultation before becoming an amendment of the law regulating the TASE.

This announcement comes out curiously after the Israeli stock exchange witnessed the abrupt growth of several companies whose value multiplied after pointing out intentions of linking to the blockchain and cryptocurrency ecosystem.

The shares of companies such as Apollo Power, Apply Advance Mobile Technologies and Natural Resource Holdings, recently experienced an epic and rapid increase in value by announcing that they would join initiatives related to the development of blockchain technology and the mining of cryptocurrencies. The most important thing is that all these companies operate in the TASE, so that the value of their shares could be affected if the proposal mentioned by the financial authority is approved.