Israel-based crypto exchange Bits of Gold became the first crypto firm in the country to receive a license from the Capital Market Authority, according For a social media post from the company on Sunday.

- Advertisement -

As a result of obtaining the license, Bits of Gold will be able to store digital currencies through secure custody in the “Bits of Gold Wallet” which they have been working on for some time. It will also start providing a service that will enable banks and other financial institutions to connect to their digital asset services.

- Advertisement -

In a public statement, Bits of Gold said the license is the next step in its mission to make the world of digital currencies more accessible to the Israeli public in a “simple and secure way.”

Authorities in Israel are banning cash payments in the country as it tries to combat illegal activity and drive the transition to digital payments within the country.

- Advertisement -

Despite this, institutional adoption in the country has been slow as Israeli banks have been very unfriendly towards crypto and blockchain services, citing anti-money laundering (AML) issues.

In 2017, the Israeli Supreme Court ruled that local bank Leumi was legally allowed to deny service to Bits of Gold, claiming the bank’s bitcoin (BTC) nature made it impossible for them to comply with AML requirements. has made it.

The Supreme Court’s position changed by 2019, however, when it ruled that Leumi could not block Bits of Gold’s account based on regulatory concerns, setting a precedent for other cryptocurrency firms in doing so.

The implementation of new AML rules by the government in Israel opened the way for cooperation between banks and the crypto industry. The development also set a requirement that crypto companies must be licensed, although companies that applied for one were temporarily allowed to continue their operations.

Coinbase enters the Netherlands with central bank approval

Another obstacle to institutional adoption in Israel is its taxation laws. According to a report released by crypto analytics firm Coincube on 8 September, the country was recently ranked as the third worst country for crypto taxation.

According to Coincube, the sale of crypto is typically subject to a capital gains tax of up to 33% in Israel and an income tax of up to 50% if the investment activity is deemed to be business-related.

While the Capital Markets, Insurance and Savings Authority already granted the first Israeli crypto license to infrastructure firm Hybrid Bridge Holdings earlier this month, the license that Bits of Gold received represents the first license granted to an active broker. Is.