Israel wants to recognize Bitcoin as a currency

Israel wants to recognize Bitcoin as a currency
The Government of Israel is working on a new bill to change Bitcoin’s status from asset to currency.
Tel Aviv

The bill was tabled by four members of the nationalist political party Yisrael Beiteinu and its aim is to regulate the taxation of digital currency activities. At present, the sale of bitcoin is subject to a 25% capital gains tax.

The authors of the law claim that the regulatory policy in Israel is not at all adapted to the reality in this area, because each sale is classified as capital income and is a subject to capital gains tax.

The aim of the proposal is to add a section to the Income Tax Decree according to which the cryptocurrencies are classified as distributed digital currencies.

According to the bill, it is stipulated that a distributed digital currency is a currency in connection where there are facts such as:

(1) its issuance is carried out via a distributed computer network in accordance with pre-established legal regulations of the system

(2) the initial issue of a currency unit; was not intended for payment to either party;

(3) the market value determined for the free market currency is not less than NIS 1 billion, according to a calculation method set by the Minister with the agreement of the Knesset Finance Committee, depending on the size of the market;

(4) is intended for general use and has not been issued for business.

The report also draws attention to the Israeli market, which can be helped by bitcoin and act as an engine of growth in the context of the development of the country’s high-tech industry.

MK Oded Forer, as one of the authors of the proposal, added:

The state of Israel has the ability to be among the leaders in digital currencies if it only recognizes the use of the blockchain as a currency for everything.

Read also: Indian state of Tamil Nadu becomes the first in the country to introduce an ethical policy of AI, Blockchain, Cybersecurity

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