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Bitcoinist achieved with Youval Rouach, co-founder and CEO of Bitcoin of Gold, an Israeli Bitcoin cryptocurrency trading platform. Rouach explains the legal situation in Israel for the cryptocurrencies and the plans of his company that go on.
Bitcoinist: when was Bits of Gold launched? Why did you decide to start this business?
Youval Rouach: Bits of Gold was founded by my brother Jonathan (co-founder and CEO of QED-it) and me since 2013, and from January 13th we celebrate exactly 6 years of activity. We decided then that we need to spread the word about Bitcoin and we knew that Israel should have its own cryptocurrency trading platform.
Do you operate only in Israel? Because the company is registered in Bulgaria?
Bits of Gold is registered and licensed in Israel and mainly serves the Israeli market. Bits of Gold also has a daughter company registered in Bulgaria that processes credit card transactions, since Israeli acquirers (who also control credit card issuers, which is hampered) prohibit card processing of credit for cryptocurrency transactions. We certainly intend to use our Israeli and Bulgarian entities to expand our services in Europe and other international markets.
What kind of bitcoin trading question have you seen over the years? Can you provide some numbers?
The overall demand for Bitcoin over the last six years has obviously increased significantly and is usually related to the Bitcoin rate, at least for the retail market.
I believe the correlation can help you take the numbers. The interesting part is the increase in the demand for B2B trading services during the last year, although the Bitcoin rate has declined since December 2017.
We see the encrypted ecosystem evolving in front of our eyes while a wider range of companies tries to exchange cryptocurrencies. Our main focus is still private users, but there is great potential for the flow of business and institutional affairs in 2019.
Did you previously say that you are not going to launch in the United States because of the regulatory climate there? It is still so?
We do our best to work as safely as possible in this volatile regulatory environment. Our legitimacy derives from our regulatory moves and decisions and we owe this to our customers. The United States has a unique legal framework for cryptographic activities that is not currently suitable for our activities, so we decided to continue strengthening our existing infrastructure.
What other jurisdictions are you trying to expand?
The European Union will probably be our next target market.
What you see as the biggest obstacle to bitcoin adoption?
I believe that fulfilling the prophecy of Bitcoin as a means of international payment is the Holy Grail for mass adoption worldwide. On the road to this goal, I suppose the institutional and banking activity in the ecosystem will help a lot to create the necessary public confidence for adoption.
Where Israel is a favorable location for bitcoins in terms of development, regulation, businesses, etc..?
I have to divide it into two opposite answers. On the one hand, Israel is a very advanced country in terms of encryption: there are already laws on money laundering, taxation, licenses and even drafts and reports on securities.
On the other hand, the banking sector regulation is still vague and unclear and this creates a truly negative business environment for current and new initiatives in the ecosystem. The Bank of Israel has not yet implemented any policy that can help commercial banks manage encrypted companies and manage their risks properly.
As far as we are concerned, we are in personal contact with all the competent authorities and regulatory authorities and we participate in the various "round tables" relating to the aforementioned regulatory processes.
What developments are you most excited about for cryptocurrencies in the near future?
I am definitely excited by the imminent increase in stablecoin and other programmable resources such as security tokens and other asset-based tokens. We believe this is the next generation of our business, which will have the potential to radically change the ecosystem.
What are the prospects for Bits of Gold in 2019 and beyond?
We are excited to launch our new website in the first quarter of 2019, which will reveal a whole new range of products and services, such as our API and other business tools. As I said, we are strong and stable enough to expand into international markets, starting with Europe, and you could even see us enter into important partnerships with other players in the industry.
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