Cryptocurrencies: Israel enters into crypto partnership with Switzerland
Two of the world’s most advanced cryptocurrency markets agree to exchange notes on blockchain regulation.
Israel and Switzerland have agreed to collaborate on issues including financial technology regulation, cryptocurrencies, market access and the fight against money laundering and terrorism finance. It is a move that should bring two of the world’s most sophisticated fintech markets closer together.
The announcement follows a visit to Israel by Switzerland’s finance minister, Ueli Maurer, and the head of its state secretariat for international financial matters, Jörg Gasser.
In interviews with Euromoney, cryptocurrency businesspeople applauded the decision, saying it would be useful for the market’s leading regulators to learn from each other, to better regulate and foster new financial technologies.
Speaking from Tel Aviv, Uriel Peled, the co-founder of public blockchain Orbs, says that Israel can learn from Switzerland’s initiatives in financial technology. He says that banking and anti-money laundering laws are still weak there, as are regulations around the sale of securities, thus hindering the market’s growth. Switzerland, he says, is more advanced in all of these areas, so Israel can learn from its expertise.
Conversely, Peled says, Israel is a pioneer in drafting tax laws favourable to the development of the market. For example, Israel considers virtual currencies to be financial assets, rather than actual currencies, meaning that they are subject to capital gain taxes, of up to 25% – a favourable rate for the country.
In a report, Ernst & Young says Israel’s applicable tax regime, described in a circular on digital tokens published by the tax authority earlier this year, “demonstrates Israel’s invigorative approach towards blockchain technologies and cryptocurrencies”, and “provides an opportunity for multinationals that are seeking to expand their operations in the virtual era”.
Peled says he welcomes that: “It’s super important for startups in Israel to have support on the incentive and regulatory sides.”