Bitcoin Will Not Come Under Currency Bracket – Israel Ruling

By Julie j May 23, 2019 Off

Several proponents in the cryptocurrency space have been focusing on making Bitcoin as a mainstream payment system, improving adoption and acceptance. 

Several investors across the world consider cryptocurrency as a larger asset type, while several others consider it to be a speculative asset.

Israel recently commented on Bitcoin.  The apex court of Israel stated that cryptocurrency was an asset and not a currency. A similar decision has been voiced by the Central Bank of Israel regarding the Bitcoin.

Judge Shmuel Bornstein stated, recently stated, “The Central District Court in Lod accepted the tax authority’s interpretation, and held that Bitcoin is an asset and not a currency and that the transaction in question is therefore taxable.”

The clingy thing about the decision is that Bitcoin becomes taxable, thereby making it fall directly under the control of the regulatory norms of the financial authorities of the country.  The current ruling from Israel is proof enough that it will never come under the ‘currency’ bracket per their norms.

According to an Israeli law firm, “The ruling is a signal to all those who have yet to report cryptocurrency-related profits or based their actions on differing legal advice … The ruling is unequivocal, and since it is not new legalization but a judicial interpretation, it applies retroactively.”

Ever since 2018, Isreal has been keeping a very firm eye on the activities around cryptocurrency.  Those investors who have been involved in shady dealings have been sent strict notices requesting them to provide with the transactional information.

With improved global connectedness, it has become important to send money from one person to another, in between banks, and between countries.  The process takes several days to clear. So, an inexpensive alternative which will provide for quick transfer of funds between countries will be deemed very important and welcome.

With cryptocurrency transactions, the Bitcoin transactional fee is very cheap when compared to traditional methods.  The charges are fair, and there are no profit motives in these transactions. Some critics state that cryptocurrency can be used on cross-border payments, but the fees have become high and that it has failed to scale.  However, the large block scaling solutions have made this possible.

Cross-border payment solutions are one major area where Bitcoin and other cryptocurrencies can be of great help.  With the improvement in technology, security, and coding systems, cryptocurrency will only become an easier and better solution to send money overseas.   The cryptocurrency market continues to retain bullish sentiments.