Israel puts the brakes on cash to spur digital payments
In a move to dissuade illegal activities and promote digital payments, Israeli authorities crackdown on cash payments
By Shashank Bhardwaj
The Israeli authorities have piled on restrictions on the use of cash payments to discourage illegal activity and instead allow digital payments to flourish in the country.
Since January 2019, authorities have subjected businesses and consumers in Israel to restrictions under the Law for the Reduction in the Use of Cash to allow them to crackdown on illicit activities such as money laundering, tax evasion and black market trading. The regulations were tightened on Monday to further their cause. Tamar Bracha, a part of the Israel Tax Authority, said, “The goal is to reduce cash fluidity in the market, mainly because crime organizations tend to rely on cash.”
Under the new restrictions, the limits on cash payments are $1,760 USD, or 6,000 Israeli shekels, for business transactions and $4,400 USD, or 15,000 shekels, in personal/consumer transactions. Reports also suggest that these restrictions could be further tightened in the future, barring the possession of more than $58,660 USD, or 200,000 shekels, in cash at private residences.
This move by the Israeli authorities is bound to have a positive impact on crypto adoption in the country. It is also said to be echoed by countries worldwide, with the founder of Lyn Alden Investment Strategy saying that the trend “will probably continue to other countries over time.”
CBDCs and crypto regulation
Israel also seems to be greatly warming up to the idea of crypto, since it was one of the only countries in the region exploring central bank digital currencies (CBDCs) in 2017.
The Bank of Israel indicated in May that , following a public consultation around its plans for ‘digital shekels’, the response was mainly supportive with people believing that CBDCs would impact the payments market and address the legal and technological challenges. The project went further in June, when the Bank of Israel revealed that it had conducted an experiment looking at user privacy and the use of smart contracts in payments.
Furthermore, this year’s annual Israel Crypto Conference in May also unveiled the country’s plans of creating a regulatory framework around digital assets. Jonathan Shek of Oz Finance teased this in the conference but did not give an exact date, but said that the government was looking at the growth of the crypto market in a positive light.
Shashank is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash
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