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March 27, 2014 9:37 am

End of the Shekel? New Virtual Currency Launched in Israel

avatar by Gidon Ben-Zvi

Twenty Shekel bill, with special text celebrating Israel's sixty years anniversary. Photo: wiki commons.

A new virtual currency named isracoin will be available in Israel beginning on Wednesday, Israel’s Channel 2 reported.

The currency is based on the same principles as other virtual national tender such as the Icelandic Aurora, according to the report.

Isracoin was created by six developers, some of whom are associated with Israel’s 2011 social protest movement and the country’s open source community.

The creators of isracoin intend to hand out 10 percent of the total amount of planned isracoins — 480 million out of 4.8 billion. These will be distributed to businesses in Israel and Jewish state residents according to a plan that is specified on the company’s website, Channel 2 said.

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According to the website, “The first phase of the plan calls for the distribution of 500 isracoins to every business that adopts it as a means of payment, up to 50,000 businesses. This will happen one month before the second phase, in order to prepare as many businesses as possible for the day the general public receives the virtual coins.”

The second phase will involve “distributing the coins to every verified Israeli citizen, up to a maximum of 2,850,000 people.”

Until now virtual tender has appeared mainly in countries with plummeting economies, such as Iceland, Spain and Cyprus.

The developer of the Icelandic Aurora coin, Baldur Odinson, said he created the coin in response to strict capital limitations imposed by the Icelandic government following the collapse of the country’s economy in 2008. Under the limitations, Icelandic citizens, still reeling from high inflation, cannot exchange their currency to dollars or Euros. They are also unable to purchase other virtual currencies such as the bitcoin.

Isracoin’s developers maintain that the distribution plan for their virtual currency will encourage its usage, Channel 2 said.

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