Today, Israel has imposed further restrictions on the usage of cash for payment. The aim is to reduce the case of illegal activities and increase the usage of digital payment options.
Israel Government Pushing Citizens To Embrace Digital Payment
In January 2019, the government subjected Israeli consumers and businesses to cash payment limits. It also has a law on the reduction of cash usage.
The restriction is to ensure that the citizens make use of digital payment. As a result, authorities would be able to monitor tax evasion, money laundering, and activities on the black market.
Israel introduced the new limits for cash payments, effective from today, August 1st. It imposes a limit of 4,400 USD (NIS 6,000) for personal transactions and 1,760 USD (NIS 15,000) for businesses.
Meanwhile, the country expects more restrictions in the future. This will prevent citizens from keeping over NIS 200,000 in cash (58,660 USD).
Tamar Bracha, an executive at the ITA (Israel Tax Authority), said that reducing available cash would make criminal activities difficult. This would decrease the availability of cash in the country’s market.
However, many believe the recent limits are a welcome development. This is because it would accelerate the usage of digital currencies in Israel.
Crypto Regulation And CBDC In Israel
On July 30th, Lark Davis, a crypto influencer, told his Twitter followers that Israel would not be the last nation to impose such limits. Also, Lyn Alden, the founder of an investment firm, believes the tender will spread globally.
Meanwhile, Israel is among the nations exploring the usage of CBDCs. It first considered the idea in 2017.
In May, the nation’s central bank reported that there is huge support for more research on CBDCs. According to the Bank of Israel, the research would assess monetary stability, the impact on the financial market, and technological problems.
In June, the central bank said it had carried out a lab experiment on using CBDC for payment. The bank reported that smart contracts are very risky and should be under its jurisdiction.
Additionally, Israel is working on a crypto regulatory framework. At the Crypto Conference, which was held in May, the CEO of Oz Finance said Israel is working on comprehensive crypto regulation.
However, he did not give a set a date for the release of the regulations. Meanwhile, he said the regulations would come later on.
