ISRAEL Trends and Developments Contributed by: Ohad Phillip, Shaul Zioni, Lior Kiperman and Avia Alon, Zioni Pillersdorf Phillip Advocates
Outlook Israel’s crypto market is moving from improvisation to infrastructure. The main developments of the past year are not only about individual products or transac- tions. They show a system trying to answer a deeper question: can Israel build a regulated crypto economy without pushing innovation offshore? The answer is still open. If banking access improves, tax reporting becomes more practical and stablecoin legislation advances, Israel could become a meaning- ful regulated hub for blockchain-based financial activ- ity. If those reforms stall, Israeli founders and investors may continue building for global markets from outside Israel.
These questions are not theoretical. A shekel stable- coin could be used in payments, remittances, trading, payroll, tokenised assets and decentralised finance applications. If Israel wants such products to scale beyond pilots, a clear statute will likely be needed. What this means for clients The past year shows that Israel is not standing still. The country now has approval for a regulated shekel stablecoin, a major local exchange transac- tion, renewed tax enforcement attention, a voluntary disclosure infrastructure, ongoing banking reform discussions and serious central bank work on digital money. That is a substantial agenda for a relatively small market. At the same time, clients should not assume that the path is simple. The most important practical barriers remain first and foremost opening and maintaining bank accounts, but also dealing with multiple regula- tors and identifying the correct licence for each activ- ity. The direction of travel is positive for businesses that are willing to operate transparently and invest in com- pliance. Israel is likely to remain a strong source of blockchain technology, cybersecurity expertise and financial innovation. The opportunity is greatest for companies that can connect that technology base to regulated financial use cases.
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