Cryptocurrencies are being placed under various regulatory frameworks across different parts of the globe. Israel is the latest to open up about its crypto regulations as a new bill has been drafted by four members of the Nationalist party Yisrael Beiteinu that aims to regulate crypto taxes in the nation.
The group led by Oded Forer considers that the existing system of a 25% capital gains tax on Bitcoin obsolete. As such, the members are looking to amend the current system with a more adaptable framework that better defines cryptocurrencies.
The private member’s bill wants to address certain “distributed digital currencies” as currency, instead of a taxable asset, and thereby exempting them from capital gains tax. Cryptocurrencies like Bitcoin, that meet a certain set of requirements will be considered a currency for both trading and taxation purposes.
The cryptocurrency must be operated by a distributed issuance network and not be under the influence of a centralized entity. The token must also have a market capital of 1 billion shekel ($288 million) or more. The currency must also have a general utility purpose and must not be designated for certain utilities or entities.
According to the authors Oded Forer, Evgeny Sova, Yulia Malinovsky, and Alex Kushnir, only Bitcoin and certain are digital currencies currently meet these criteria.
The bill also intends to focus on other areas like boosting the development and adoption of blockchain technology in the nation. The party members believe Israel has the potential to be a leader in digital currency and blockchain tech innovation.
The bill states:
“It is precisely in this period when the economic future is not clear that it is possible to promote digital payment options due to the social distance that has been forced on us.”
The new system will make the taxation system for Bitcoiners much simpler while also making the eligible asset a popular payment mechanism. With this, the authors want to drive the demand for crypto.
“This regulatory clarity will create commercial certainty and allow more digital currencies to enter the Israeli market,” the lawmakers wrote in their proposal.
Since the Yisrael Beiteinu party is a part of the opposition in Israel’s parliament, it unlikely that the bill will ever be passed without proper backing from members of the majority. However, if implemented, it will make Israel a Bitcoin haven for crypto enthusiasts all across the globe.