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Israel’s Central Bank Warns on Potential Fraud With Bitcoin

Israel’s central bank and finance ministry issued a warning today against the use of virtual currencies such as Bitcoin, saying they aren’t legal tender and are prone to fraud and misuse.

“Virtual currencies are not issued by a central bank, and are not backed by a central bank which guarantees the nominal value of currency,” the Bank of Israel said today in an e-mailed statement. “They aren’t legal tender in Israel, and therefore there is no requirement to accept them as payment for any asset or service or as repayment of a financial loan.”