Currently one hears from the side of the Israeli Ministry of Finance, that they want to issue in 2018 in cooperation with the local central bank its own cryptocurrency. The crypto-shekel is intended to curb the Bitcoin hype and help fight the country’s black market. In January, however, the plans must first approve the majority of Knesset MPs.
An anonymous Finance Ministry spokesman told Jerusalem Post yesterday Sunday that transactions are to be conducted with their own smartphone app. Both money laundering and tax evasion should be combated with it. It is currently unclear whether the wallets should be stored on the servers of the central bank or decentrally on the owners’ smartphones. The spokesman for the Israeli central bank rejected any comments in this respect. Wallet service provider Colu, based in Tel Aviv, will also be part of talks with the Israeli government. Its vice-president, Mark Smargon, told Cointelegraph that they would like to be part of the new vision as soon as the initiative becomes reality.
The Israeli regulatory authority has been investigating the possibilities of digital currencies for quite some time. We were part of these talks. Once this initiative is realized, Colu would be really glad to be there. We believe that digital currencies are the future of money.
According to the media, the state regulators have been discussing the framework conditions for several months to emit their own crypto-shekel. The relevant draft legislation will be published in January next year and its validity will be reviewed. The digital shekel should have the same value as the paper currency. With the help of the new cryptocurrency, immediate credits should be possible for the recipient. With conventional transfers, the credit on the current account of the recipient leaves several days in the future. The government in Jerusalem hopes to contain the run of the Israeli people in other cryptocurrencies. Above all, one wants to regain control over all transactions in order to understand them in detail. The goal is to limit the country’s black market. At present, the black market in Israel accounts for up to 22 percent of the country’s gross domestic product. According to estimates, the tax authorities are expected to avoid nearly 13 billion euros in taxes each year.
Israeli media agree that the central bank may regard the unregulated cryptocurrencies as a competitor and because of the lack of control, even as a threat. An own digital currency would therefore be an attempt to get hold of this competition. Ultra-Orthodox members of the Knesset demanded two years ago that they should greatly reduce the use of cash in the country. Although many residents have problems opening their own current account. On the other hand, cash promotes the black market and tax evasion, because official bodies can no longer follow the trail of money in cash payments. The payment of any salary in cash, however, should not be legalized. It seeks to guarantee compliance with minimum wages and avoid further tax evasion.
