For some months now, several regulators have warned against side effects of using digital currency. Regulators such as China and India have gone as far as to take measures in halting trading. Israel’s stance on the matter seems to be a unique one. Instead of simply ignoring the crypto-currency, Israel bitcoin regulators lie in wait to see how other countries are dealing with it.
Some Israeli financial institutions are open to bitcoin transactions, but would like to be given somewhat of a blessing from regulators as to how they can continue using it. The Bank of Israel and the Israeli government haven’t commented on the issue at hand.
Haaretz has reported that regulators feel no need to forbid digital currencies for the time being. Banking law Attorney Shiri Shaham, told reporters that no Israeli legislation today could address bitcoin or other similar digital currencies. For now, the use of digital currency in Israel is legal. Shaham said:
“Bitcoin brings with it a lot of innovation that has not existed until now. Consequently, it’s no wonder that it was not in the wherewithal of lawmakers in Israel and around the world to foresee this development and address it.”
Guy Lachmann, a colleague of Shaham’s says the laws of most Western countries, define currency as the country’s legal tender, backing it as a valid means of payment in or out of its borders. Lachmann says:
“At this time, I don’t know a single country around the globe that recognizes Bitcoin as a legal tender, and therefore it should not be seen as a currency.”
Shaham also contests that the government can not prevent the use of bitcoin. If regulators were to prevent bitcoin transactions, they would fall behind with one of the world’s largest growing trends.
“People who want to get their hands on Bitcoin will always succeed and it would be a pity if were to occur in the shadows and not under the supervision of the banking system.”
Former income tax commissioner Tali Yaron-Eldar says traders must claim their bitcoin trades to income tax authorities. A potential exception could be made for people who make a one-time purchase of bitcoin, without intending to use it as an investment, and later sold it at a profit. This can even depend on the size of the amount from the sale.
Of course nothing is official just yet. We will have to wait and see what Israel decides for its bitcoin community.
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