Why are Israeli Banks Refusing to Take Fiat Deposits from Cryptocurrency Traders?
On August 6th we reported the difficulty experienced by Israeli cryptocurrency traders to pay taxes given the concerns raised by the banking industry. With over $85 million USD in tax arrears to be paid to the government, cryptocurrency traders are blaming the banks for purposefully creating a barrier due to the competition from the emerging technology.
Will the war between the two come to a resolve? Not anytime soon given the banks sees cryptocurrency as a replacement to the long-standing industry.
‘Government turning a Blind Eye’
One of the Bitcoin traders in the country, Ron Gross, talked to Haaretz, an Israeli publication, blaming the systems in place for constricting cryptocurrency traders from paying their taxes from trading. The traders complain that their funds are locked up in various countries such as Switzerland and have no means to getting into Israel given the banks refusal to accept their deposits.
Despite the government and tax authorities fully aware of the problems facing the traders, they have chosen to do nothing as Ron puts it:
“The tax authority is aware of the problem, but they say the ball isn’t in their court.”
The Israel tax authorities charges the cryptocurrency traders 25% capital gains tax while corporations in the crypto industry pay upwards of 47 percent.
Competition for the Shekel
On July 19, reports from the local dailies announced the Israeli National as part of a larger cryptocurrency scam worth over $1.7 million USD. Such scams and other illegal activities ‘enhanced’ by cryptocurrencies are the main reason as to why banks are not accepting cryptocurrency traders to deposit.
Or Is It The Competition From The Emerging Asset Class?
The emerging virtual currencies are raising doubt among a number of governments across the world. Israel’s shekel is currently in doubt as a long term currency in Pakistan, as the latter aims to replace it with a digital sovereign currency. Israel’s government has also come out strongly calling out for the development of digital currency to replace the national currency.