Israel’s Ministry of Finance has proposed new guidelines on digital asset regulation, in order to bring cryptocurrencies into the country’s economy, and has proposed ideas for taxing crypto within the state.
On Monday, Israel’s Ministry of Finance published recommendations for crypto regulation, bringing further progress to integrating cryptocurrencies into the country’s economy.
Amongst the recommendations include:
- A creation of a new regulatory infrastructure, designed for crypto
- Legislating licensing powers
- Supervision of token and stablecoin issuance
- Provision of financial services through crypto-based financial products
Israel’s Ministry of Finance also suggested for the Bank of Israel to hold the role of supervisor of digital assets “that have a significant stability of monetary effect”, and should be put into legislation.
According to the recommendations, the Bank of Israel is to hold a role much more than being a watchful eye over crypto issuance.
Israel’s Ministry of Finance also had proposed that Israel-based crypto holders would pay taxes for any crypto held abroad to the Bank of Israel.
The proposal adds that an inter-ministerial committee will also be appointed to look after decentralised autonomous organisations (DAOs), further putting Web3 under the government’s eye under Israel’s borders.
The document from Israel’s Ministry of Finance seems to focus on the possibility of taxing crypto. From 2019-2022, Israel’s tax authority has found that uncollected crypto taxes from Israel can amount to millions of dollars – or as they put it, several billions of shekels, where one shekel is worth approximately US29 cents.
Authorities in Israel have been taking further notice of the crypto and digital asset industry, and are attempting to keep up with the market trends.
This September, the Israeli markets regulator had granted a permanent crypto business licence to a private company – the first of its kind within the country.
Back in October, the Tel Aviv Stock Exchange (TASE), Israel’s only public trading platform for equity and debt, revealed plans to establish a blockchain-based digital asset trading platform.
In these plans, TASE intends to improve existing markets infrastructure by using distributed ledger technology (DLT), and to offer digital assets services and products.
TASE is currently collaborating with the Israeli Ministry of Finance, alongside digital asset infrastructure firms Fireblocks and VMWare to issue a blockchain-based digital state bond.
