Israel, the promised land of blockchain and cryptocurrency? Source: Pixabay
Crypto Superstars! – For some time now, Israeli institutions have expressed interest in blockchain and cryptocurrencies. In addition, Leumi, one of Israel’s major banks, has just announced opening of a cryptocurrency trading facility. “Pepper Invest clients will be able to buy, hold, and trade bitcoins using the service.”
Crypto Trading Service for Leumi Clients
According to Reuters, Leumi’s digital investing platform, Pepper Invest, has teamed up with blockchain infrastructure vendor Paxos. What is the goal? Create a bitcoin trading platform. Customers of Pepper Invest will be able to use this new service to purchase, trade, and keep cryptocurrencies.
“We are proud to be the first in the Israeli banking system and one of the few in the world to offer our customers the ability to trade cryptocurrencies simply, securely,and reliably, without the need to download a crypto wallet and with all tax complexities resolved by the bank.“
Initially, this service will only accept BTC and ETH. Other crypto-assets should be supported eventually. According to the article, the minimum transaction amount for cryptocurrency has been established at roughly $15.50 (50 shekels). However, we do not yet know when the platform will be available because it is currently seeking regulatory certification.
“Pepper will collect the taxes, in accordance with the guidelines of the Israel Tax Authority, so that customers do not have to deal with tax complexities. »
A First for the Israeli Bank
“Pepper will be the first banking platform in Israel…to allow its customers to trade cryptocurrencies, in an attractive pricing model.” Reuters has further information about the news. According to them, the service would soon be available to all other Bank Leumi clients.
Leumi Group and Paxos, a regulated US blockchain infrastructure platform, collaborated on the new service. Paxos, which was founded in 2012, has regulatory licenses in the United States. It manages over $20 billion in assets and services over 400 million customers globally.
Leumi Bank previously closed the Bits Of Gold exchange account due to regulatory issues. However, at the time, a Supreme Court justice stated that Leumi Bank could not restrict the crypto exchange account.
Despite the Supreme Court’s decision against Leumi, the bank is said to have maintained its stance against the exchange. However, the court body’s judgment created a precedent for Israeli cryptocurrency enterprises. As a result, people could use standard banking services in the region lawfully.
Previously, many banks in various countries were unwilling to accept Bitcoin (BTC) and other cryptocurrencies. This scenario is changing as corporate and individual demand is growing. The majority of regulators have likewise altered their thoughts. Their explicit bans are progressively switching to the creation of regulatory frameworks. This discovery is noteworthy because it indicates a paradigm change in the traditional banking sector’s stance toward crypto-assets.
Persons offering services involving “financial assets” in Israel must get a license from the Supervisor of Financial Services under the Supervision on Financial Services (Regulated Financial Services) Law 5776-2016. “Virtual money” is included in the definition of “financial assets.” In most cases, a license will be granted to an Israeli citizen or resident who has achieved the age of majority, is legally competent, and has not been declared bankrupt or, in the case of a business, is not forced to dissolve. Additional licensing criteria include the licensee having a minimum defined amount of equity and, if an individual, not having been convicted of a felony that deems the licensee unsuitable to conduct financial transactions owing to its nature.
On February 19, 2014, the Bank of Israel and various regulatory authorities released a statement warning the public against dealing in virtual currencies. The warning detailed the risks of dealing in virtual currencies, such as fraud, money laundering, and terrorism funding, among others. Furthermore, according to Reuters, the Bank of Israel stated in January 2018 that “it would not recognize virtual currencies such as bitcoin as genuine currency and… it was impossible to design legislation to oversee the hazards of such activity to the country’s banks and their consumers.”
The Israel Tax Authority needs documentation of virtual currency trading transactions in order to verify their existence and extent.
Israel and Hong Kong cooperate on CBDC
In a recent release, the Bank of Israel stated that it has worked on a trial with the Hong Kong authorities. Among other things, it will evaluate the latest digital currency against cyber security vulnerabilities.
According to a release, the collaborative effort will begin in the third semester and will employ a two-tier central bank digital currency (CBDC). It will be issued by the central bank and distributed via financial intermediaries such as banks. After a group created by the central bank warned against launching a digital version of the shekel, Israel abandoned its initial effort in 2018. In fits and starts, Israel is revisiting the notion of a CBDC.
Central banks are at various phases of creating a digital currency.
Bank of America Corp. analysts argues that central banks will undoubtedly issue their own digital coins to offset the danger of losing monetary authority to decentralized cryptocurrencies or popularly embraced digital currencies such as a digital dollar.
Israel and Hong Kong are testing the retail CBDC, which is intended to allow intermediaries to handle it with no financial risk to their consumers, to see if this makes it less resistant to cyber assaults.
The Bank for International Settlements’ innovation unit will also take part in the trial.
Despite the fact that digital currency research is still in its early stages, the International Monetary Fund claims that countries all over the world are introducing CBDCs. However, China is presently in the lead due to the fact that it has previously been tested by around 140 million people, including spectators at the most recent Winter Olympics in Beijing.
Is crypto allowed in Israel?
As of November 2021, cryptocurrency is legal in Israel, but it is still being scrutinized by the government, which recently released a new set of anti-money laundering (AML) rules.
Is crypto taxed in Israel?
A bitcoin sale is usually subject to Israeli capital gains tax (up to 33 percent ). Income tax is applicable if the activity qualifies as a business based on case law requirements (business organization, expertise, frequency, etc) (up to 50 percent ).
Is crypto mining legal in Israel?
As of 2017, the Israel Tax Authorities made a statement stating that bitcoin and other cryptocurrencies will not be classified as currency, nor as financial security, but as a taxable assets.
How to cash out crypto in Israel?
How can I withdraw Bitcoin in Israel? You may sell your Bitcoin for fiat cash using any exchange having an Israeli Sheqel trading pair. Many major currencies have ILS trading pairs on Coinmama. Another option for purchasing Bitcoins in Israel is through automated teller machines (ATMs)
Is there Bitcoin ATM in Israel?
The Bitcoin Embassy in Tel Aviv unveiled the first Bitcoin ATM in Israel yesterday, allowing customers to instantly buy Bitcoin for cash. The first ATM arrived barely yesterday, and a competitor is already on its heels.