Cryptocurrency received massive news after the Israel Court of Appeal ruled out that the country’s biggest banks were not allowed to shutter digital currency broker’s bank accounts until a regulatory review was done and completed. The injunction was issued on February 26th stopping Bank Leumi from closing an account owned by Bits of Gold which is a company that hosts trading and exchange of Bitcoin and other digital currencies which are powered by blockchain technology.
This ruling came during a period when regulation talk is ongoing in Israel in an attempt to tamp down on Bitcoin and other cryptocurrencies because of their high volatility nature. A favorable decision and no considerate regulation can lead to a rapid expansion in the country and especially the local trading scene.
According to Ophir Gertner who is the founder of Smartologic Technologies:
“The latest Court decision on cryptocurrencies will help Israel to stand in the front line in the digital currency industry. It’s important that the decision has been upheld by the Supreme court.”
The country wants to follow established countries in the crypto market like the US which is leading in Blockchain innovation. However, the ruling did not stop the continued research on how to regulate Bitcoin and the other currencies. There are countries which have already started regulating Bitcoin like South Korea and Japan. Many others are still in the process of establishing how cryptocurrencies work before deciding on the method to use to regulate them.
Many people believe that Israel will get fully into cryptocurrencies after the stand on regulations is clear. Israel already boasts of around 25-40 crypto and Blockchain startups. Gertner who is a Blockchain entrepreneur believes that: “If this decision will be upheld the Israeli citizens will have an easy time to convert fiat money into digital currencies.”
On Feb 19th the Tax Authority of Israel stated that it intended to classify Bitcoin and other digital currencies under Property but not under currencies for tax purposes. This meant that digital currencies would be subjected to 20-02% capital gains tax while miners would be required to pay 17% VAT.
Gertner believes the reason Banks are fighting cryptocurrencies is that they see them as potential competitors. According to the investor: “Banks will fight because cryptocurrency concept will definitely undermine traditional Banking.” This would enable people to carry out their transactions without the need for banks to verify the transactions.