The views and interpretations in this article are those of the author and do not necessarily reflect the views of Cointelegraph.
with regard to technological innovations, is called Israel by some as a „Start-up Nation“, as Israel in 2017 has generated over 4 billion in capital. This is almost 10 per cent of the annual Fundraising total in China. While there are a number of popular Apps, platforms and products, including USB flash drives, the Waze navigation App and SodaStream drinking water conditioner that has set the country to its feet in the crypto industry.
In the year 2017, Hapoalim, Israel’s largest Bank, with Microsoft in a partnership to create a Blockchain-powered platform, which „makes the process of an application easier and faster.“ In February 2018, the Israeli tax authority (ITA) has stated that crypto-currencies will be taxed through capital gains as property.
On the 26. February 2018, the country went a step further, as the Israeli Supreme court issued the decision, which would block the Leumi Bank temporarily, which prevents the local estate agents, Bits of Gold, to sell crypto currencies.
Although many praised the interlocutory judgment quickly, as a precedent, there is still much room for further development. The judge who conducts the case, Anat Baron, said that their decision „intends to harm the rights of the Bank to analyze any with the Bank account transaction taking place or to take measures which are associated with the minimization of risks.“ This means that crypto-currency brokers and stock exchanges, which set the level of transparency in the first place, be regarded as a legal – for the time being.
The Supreme court of Israel, in session (The Times of Israel)
Yuval Roash, founder and CEO of Bits of Gold, believes this decision is justified, and says:
„the regulation is one of the things that were important. From the beginning, we saw the Problem with Bitcoin in terms of its anonymous nature, and we wanted to get a monetary Service certificate and we received it in August 2013.
This is to comply with a significant progress since December of last year, when a district court in Tel Aviv ruled in favor of Leumi Bank, which had refused to use Bits of Gold, as Bitcoin was able to Anti-money laundering Standards. Bank Leumi’s voice also in the choirs, the said stock exchanges „websites, the gambling transactions are to facilitate“, which is particularly for Israel is a sore point. The country has not proved to be careful not to disturb the balance within its borders and prevented even the Israeli debut of the popular ride App Uber.
After judge Baron had studied the last five years of the operations of Bits of Gold, he noted that Leumis earlier assumption that the law would occur violations, if Bitcoin would not be controlled, was wrong.
In terms of the judgment Yair Geva, head of the Hi-Tech Department of the Israeli law firm of Herzog, Fox & Ne’eman noted that:
„It should be emphasized that the court in the – decisive – question of principle to decide whether the Bank Leumi is entitled to refuse to provide banking services for the crypto currency trading. Although the final decision is still pending, seems to be this recent judgment of the Supreme court, the enormous growth of the crypto industry in Israel and, in particular, the High-Tech and the financial industry in General to continue to give back the wind. One of the reasons for this is that the Supreme court has made clear that Bits of Gold is acting in a transparent and no legal provisions have been injured. In other words, the Supreme court noted that there is currently no direct statutory prohibition of the crypto-currency trading in Israel. It remains to be seen how the Supervisory authorities will react, in Israel, this landmark decision.“
Regardless of how the Supervisory authorities will react, it is already clear that the progress of the Blockchain-not to have slowed innovation in Israel.
„As with any new and promising technology will be of interest to jurisdictions in developing a balanced policy for the promotion of innovation and Adoption, on a large scale for talent and business in their Ecosystems. The best part will be the one who is pursuing a learning approach that allows entrepreneurs and institutions, to understand in depth how these technologies affect all interest groups and to develop policies that are for the most advantage and the Public about compromise and accountability to educate. Israel has always seen the progress of the technology as a strength and opportunity and is well positioned to be in the development and application of Blockchain leader,“ said Galia Benartzi, co-founder of Bancor.
Itay Nagler, an Israeli citizen and CEO of the blockchain-based travel Start-ups, Cool Cousin, says that Israelis as a Standard, the perception is undermined, that things cannot change, or should be.
„We have come almost to believe that there is always a better and more efficient way to do things. This is one of the main reasons for this is that in such a small country, many great innovative companies and individuals are established. This is also an explanation for why the Israelis are one of the First, the Blockchain technology and crypto. Many of us see it as a wonderful solution for many problems and our mentality of „have no fear“ before the change, and the relatively easy access to quality manpower and financing enables us to react to it. This has helped us in the past few decades to position ourselves as the pioneers and experts in many industries.
Even if there was previously no specific regulations in the industry, it hasn’t stopped the entrepreneurs from its own Blockchain projects. Bancor was one of the first large ICOs, which has collected in just a few minutes more than 120 million euros, and its origin in Israel. IOTA, an IoT-focused Blockchain-solution, Recently opened an office in Tel Aviv, and noted that the city is „a well-established Tech Hub of Start-up Reports to be found always in the Top 10.“
These positive changes, however, is in contradiction to the recent decision by der Israeli Supervisory authorities, due to the „trade volatility“ in the crypto industry companies included in the TASE-Tel Aviv stock exchange indices.
Israel seems to go along with the Rest of the world in the Blockchain Ecosystem, but it will first attempt to ensure that the grey zones of the market are limited, while its most useful attributes can thrive.