Israel To Ban Cash Payments Over $4,400; A Case For Crypto?

August 3, 2022 9:25 pm

The country of Israel has just announced that it will be banning all cash payments that amount to more than $4,400 for personal transactions.

This means that the citizens will be much more restricted in their use of cash which will likely promote the use of digital payments such as crypto.

So far, the reasoning for this new ban is that it will help fight illegal financial activity and violations of this new ban will also result in large fines.

With cash now being discouraged from being used in large amounts, the country could be a perfect case for the use of digital assets such as Bitcoin, XRP, and central bank digital currencies (CBDCs).

CryptoBriefing reports:

According to the Israel Tax Authority, the law is meant to reduce the use of cash by Israelis and fight against crime including money laundering, tax evasion, and terrorist financing.

The upcoming rules will promote digital payments, making it easier for authorities in Israel to monitor financial activity.

Other developments could also work toward this end. In June, the Bank of Israel announced that it would test the feasibility of a retail central bank digital currency (CBDC) later this year, with results expected by the end of 2022. A CBDC, like other digital payments, would be easy to trace and monitor.

Israel is just one of several nations that are developing or exploring CBDCs.

France’s central bank announced this month that it is hoping to launch a “wholesale” CBDC—a digital currency for use between financial institutions—by 2023.

Israel is certainly one of the countries that may be likely to implement a CBDC for retail use much earlier than many other countries.

The fact that results are already expected by the end of 2022 is already much earlier than many previously expected.

As a result, adoption of the use of CBDCs could likely further promote more mainstream adoption of all other digital assets such as XRP and BTC.

In comparison, the United States may be much later with the Federal Reserve saying that a launch of a CBDC would take up to 5 years after Congressional approval.

With that being said, many within the crypto community believe that it is inevitable and that it is just a matter of time.

CoinTelegraph reports:

In May, the Bank of Israel revealed the responses to a public consultation around its plans for a “digital shekel,” indicating that there was strong support for continued research on CBDCs and how it would impact the payments market, financial and monetary stability and legal and technological issues.

In June, the Bank of Israel revealed it had conducted a lab experiment examining user privacy and smart contracts’ use in payments, marking its first technological experiment with a CBDC.

The country is also in the process of creating a regulatory framework around digital assets.

During this year’s annual Israel Crypto Conference in May, Jonathan Shek of Oz Finance revealed that Israel’s financial authorities had been preparing a comprehensive and holistic regulatory framework for digital assets.

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