Israel is a country with an incredibly vibrant startup culture and community, with a generally tech-savvy population. Thus, it is no surprise that cryptocurrency usage thrives in the tiny desert country. Now, Israeli legislators have announced their intentions to propose regulations to the Knesset that could make Bitcoin taxable as a currency and not an asset, reported Cointelegraph.
Four Israeli legislators, namely Oded Forer, Yevgeny Soba, Yulia Malinovsky, and Alex Kushnir, proposed amendments to existing legislation before the Knesset on 22 September 2020. They suggest that cryptocurrencies like Bitcoin not be subject to capital gains taxes. Current legislation provides that Bitcoin be identified as an asset and be taxed 25% when users convert it to the fiat currency.
Finance Magnates further reports that the four Knesset members all belong to the nationalist political party Yisrael Beiteinu. They claim that Israeli regulations regarding digital currency are not adequate and require more favourable amendments for cryptocurrency users.
The four Israeli legislators believe that the continued welcoming of cryptocurrency will provide for massive technological growth in the country. One of the four further argued for the advantages of blockchain technology in promoting digital payment options in the midst of the global pandemic. Covid-19 has driven people away from interacting with unsanitary physical fiat currency.
Bitcoin.com purports that Israel has a flourishing cryptocurrency community. However, a plethora of unfriendly Israeli regulations towards digital currencies hinder its growth. This requires swift change, claim the four legislators, to further allow Israel to be a world leader in cryptocurrency innovation.
Increasingly, countries have been proposing and adopting regulatory measures more welcoming to cryptocurrency to encourage its adoption. The European Union recently announced plans to introduce comprehensive cryptocurrency regulations by 2024.