The Chief Economist of the Israeli Ministry of Finance, Shira Greenberg, has filed a paper with suggestions for the country’s regulation of digital assets.
Greenberg’s Top Priority
On November 28, a 109-page report was released, and it seemed to catch the attention of senior government figures.
Eliminating the obstacles impeding the development of an appropriate regulatory framework is at the top of Greenberg’s priority list. The Chief Economist pointed out that the first step in getting Israel back on track is for the government to make clear its position on new industry entrants and to streamline the licensing procedure.
Greenberg advocated for the establishment of an effective tax structure for the digital asset sector and called for the supervisor of financial service providers to be given more authority. She added that if Israel’s securities regulations were broadened to cover virtual currencies, the market would be safer for participants.
The country’s Minister of Finance Avigdor Lieberman thanked Greenberg for her work and said that her work was the most comprehensive and up-to-date report on digital currencies ever produced in the country.
Recommendations to Guide Israeli Crypto Framework
The suggestions presented by Greenberg, according to Lieberman, balance the risks and benefits of the nation’s financial system, and he expects politicians to depend on them in developing a strong framework.
The recommendations also advocate for legislation to regulate the issuance of stablecoins and other digital assets that offer financial services. While stressing that attention should be paid to the burgeoning niche of decentralized autonomous organizations, Greenberg argued that the Bank of Israel should have major control over digital assets that could have a big impact on the economy (DAOs).
Israel’s Alarming Crypto Adoption Rate
Israel has long taken pride in being a tech-savvy nation with a young population, but these statistics have not been reflected in the adoption of digital assets in the nation. Israel ranked 111th out of 146 countries in a research by on-chain analytics company Chainalysis for its adoption rate of digital assets. This is a rather low ranking when compared to other nations.
The figures are much worse for Israel, where only 2% of people admit to having a virtual wallet, according to Greenberg. Only 21 million distributed ledger technology (DLT) transactions, or less than 0.04% of worldwide transactions, have been logged in the nation.
Israel is making tremendous progress with its central bank digital currency (CBDC), despite being behind other countries in the use of virtual currencies. The central bank has multiple pilot projects in the pipeline. In a collaboration with the Bank for International Settlements, the Bank of Israel has gone above and beyond to take into account the potential of the digital shekel in enabling cross-border transactions (BIS).
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