Israel's Ministry of Finance Proposes New Guidelines for Regulating Digital Assets

Israel's Ministry of Finance published a set of recommendations for the regulation of digital assets.

The recommendations call for the creation of a new regulatory infrastructure, legislating licensing powers and supervision over the issuance of backed digital assets, including stablecoins, and the provision of financial services through them. The recommendations also call for legislation to be passed that would transfer supervision over digital assets "that have a significant stability or monetary effect" to the Bank of Israel.

In addition, the guidelines propose that the Bank of Israel tax crypto held abroad and establish an inter-ministerial committee to oversee the regulation of DAO. The taxation of cryptocurrencies comprises a major part of the proposal. According to Israel's tax authority, uncollected crypto taxes from 2019 to 2022 could amount to several billion shekels (one shekel is worth about US29 cents).