Israel has recently come to the fore with its efforts to prioritize cryptocurrencies. Now it continues to take steps to support cryptocurrencies. In terms of technological innovation, Israeli startups took the lead, with a $5 billion capital increase in 2017. This is almost 10% of China’s annual fund total. While there are many popular apps, platforms and products such as USB flash drives, Waze navigation app, SodaStream carbonating machines, the country is also getting into the cryptocurrency industry.
Israel’s largest bank, Hapoalim, collaborated with Microsoft in 2017 to create a blockchain-powered platform. In February 2018, the Israel Tax Administration (ITA) considered cryptocurrencies “a property rather than a currency” in order to be able to tax cryptocurrencies.
On February 26, 2018, the Israeli Supreme Court issued a decision that will temporarily block the bank accounts of Leumi Bank’s Israeli crypto firm Bits of Gold. However, the court later issued an interim court order to prevent Bits of Gold, an Israeli crypto company and exchange that facilitates the trading of digital assets, from restricting any transactions.
While many cryptocurrency traders consider the interim ruling a “precedent,” the Israeli Supreme Court still leaves ample room for further development. Judge Anat Baron, who presided over the case, made a statement regarding the decision:
“This court decision is not intended to undermine the bank’s rights to analyze every transaction that takes place in the bank’s bank account or to take an action to minimize the risks that become transparent through company activities. Exchanges that trade cryptocurrencies and are transparent must first be considered legal.”
Yuval Roash, the founder and CEO of Bits of Gold, states the following regarding the court decision:
“We are the first to propose and the first supporters of the law for the use of digital currencies. From the very beginning, we saw the problem with Bitcoin in terms of its anonymous features and wanted to get a certificate of exchange service and we got it in August 2013. We will continue to be a pioneer in the industry so that digital currencies, which provide rapid development for high technology and financial industries, find the right place in the Israeli economy.”
With this decision, the Israeli Court now wants banks to allow crypto trading and prevent the restriction of bank accounts of companies related to this industry. Although this decision prevents Leumi Bank’s Bits of Gold company from blocking the bank account, banks still oppose this decision and impose restrictions on the accounts of individuals who try to transact through the company. Therefore, this decision is far from a general victory for the cryptocurrency industry in Israel yet.
It was also later discovered that this order was actually part of a regulation against the online gambling industry. Because the bank defined a number of Bitcoin exchanges as gambling sites, thus causing exchanges to block their payments.
Israel seems to have settled into the blockchain world
Bancor was one of the first major ICOs to raise over $150 million in just a few minutes and trace its origins to Israel. IOTA, an IoT-focused blockchain solution, recently opened an office in Tel Aviv, demonstrating that it is “a well-established tech hub, ranking in the top 10 in the city’s reports.” Galia Benartzi, one of the founders of Bancor, added to her statements:
“Israel has not prevented entrepreneurs from launching their own blockchain projects, although there has been no concrete regulation of the industry before.”
However, these positive changes are contrary to the recent decision of Israeli regulators due to the “trading volatility” of companies not involved in the crypto industry in Teleton Exchange indexes for SMEs. However, Israel continues to take steps to support cryptocurrencies. With these developments, Israel seems to have settled into the blockchain world along with the rest of the world.
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