In its constant battle to curb money laundering and other forms of illegalities, Israel is taking it a notch higher with its new cash payments restrictions. This move will see Israel adopt the cash-less policy, while at the same time promoting digital payments in the country.
Israel to track tax evasion with cash payments restrictions
Effective from Monday, August 1, business transactions involving cash payments over 6,000 Israeli Shekel (NIS) are banned. That’s equivalent to $1,760 United States dollars (USD). For personal transactions, however, a restriction has been placed on transactions above NIS 15,000 ($4,400).
It’s noteworthy that Israel began placing restrictions on cash payments in January 2019. The country established a Law for the Reduction in the Use of Cash, to which it has since subjected businesses and private individuals within the country.
The ultimate goal of the innovative policy, however, is to digitize payments and help authorities easily track tax evasion, money laundering, and other illicit activities.
Speaking about the latest restrictions, Tamar Bracha, who represents the Israel Tax Authority (ITA), told Media Line that restrictions such as this will drastically reduce criminal activities in the country. He said:
“The goal is to reduce cash fluidity in the market, mainly because crime organizations tend to rely on cash.”
Hope for crypto and digitization?
Meanwhile, the recent restrictions on cash in Israel may be a good sign for crypto adoption in the region. This is even more so, seeing as individuals and businesses may have to shift to crypto to bypass the established restrictions. Besides, the Israeli government has shown signs of open-mindedness toward the crypto industry. Although the country is still in the process of establishing a regulatory framework around digital assets, the signs are encouraging.
Also, just like several other nations, Israel is currently weighing its options as it regards central bank digital currencies (CDBCs). And expectedly, this would impact the payments market, and improve financial and monetary stability in the state.