Israel
IsraelA 2016 licensing law that took years to bite: Israel had 9 licensed crypto firms by mid-2026 and a shekel stablecoin bill on the table.
Key Regulatory Progress
Every law, rule and official guide on crypto in Israel: 4 apply today, and the rest show what's coming and how regulators read the rules. Each is explained in plain words and linked to the official original.
Last checked against the originals on 5 Oct 2026.
Core framework
The primary statutes that define crypto assets and who may deal in them.
- In forceApplies today
Supervision of Financial Services (Regulated Financial Services) Law, 5776-2016 (Official Gazette, Sefer HaChukim 2570)
חוק הפיקוח על שירותים פיננסיים (שירותים פיננסיים מוסדרים), התשע"ו-2016
The core law: defines virtual currency as a financial asset and makes exchanging, managing or safeguarding it a licensed activity supervised by the CMA. Published in the gazette on 1 August 2016 (Hebrew).
Read the original - GuidanceNot binding law
Digital Asset Regulation: Recommendations for the development of domestic regulation
The government's policy blueprint for crypto, recommending licensing of backed stablecoin issuers, Bank of Israel oversight of systemic tokens and clearer tax rules. English version.
Read the original
Exchanges & custody
Licensing, conduct and custody rules for trading platforms and service providers.
- EnactedPassed, not yet in force
Financial Asset Custody Provisions, Circular 2026-10-2
הוראות שמירת נכס פיננסי
Binding custody rules for financial asset service licensees: client assets in trust in segregated accounts, a custody officer, a register updated at least daily, multi-party (e.g. multisig) approval of transfers, quarterly checks by an independent accountant and controls on outsourced custodians. Published 19 July 2026, in force six months after publication (January 2027).
Read the original
Stablecoins & payments
Issuance, reserve and redemption rules for fiat-referenced tokens and payment tokens.
- ConsultationDraft out for comment
Finance Ministry and CMA publish for comment the draft law regulating the issuance of stable digital currencies in Israel
תזכיר חוק הפיקוח על שירותים פיננסיים (הנפקת מטבעות דיגיטליים יציבים), התשפ"ו-2026
Announces the draft stablecoin law, which would require a licence to issue stable digital currencies and give the CMA licensing and supervisory powers, drawing on the GENIUS Act and MiCA (gov.il blocks automated checks; URL confirmed via search).
Read the original
Tokenisation & securities
Security tokens, RWA, funds and ETFs.
- GuidanceNot binding law
Committee to Examine the Regulation of Decentralised Cryptographic Currency Issuance to the Public: Final Report
Sets out when tokens are securities under Israeli law, bringing investment tokens under the Securities Law while leaving pure payment and utility tokens outside it (IOSCO blocks automated checks; URL confirmed via search).
Read the original
AML & travel rule
Anti-money-laundering obligations and the FATF travel rule.
- In forceApplies today
Prohibition on Money Laundering Order for financial asset service providers takes effect
היום נכנס לתוקף צו איסור הלבנת הון ומימון טרור בפעילות נותני שירות בנכס פיננסי
Announces that the AML order extending identification, reporting and record-keeping duties to financial asset service providers took effect on 14 November 2021 (gov.il blocks automated checks; URL confirmed via search).
Read the original
Tax
How gains, income and transactions are taxed.
- In forceApplies today
Income Tax Circular 05/2018: Taxation of activity in decentralised means of payment ("virtual currencies")
חוזר מס הכנסה 05/2018 מיסוי פעילות באמצעי תשלום מבוזר (המכונים: 'מטבעות וירטואליים')
Treats virtual currency as an asset, not a currency, so gains are capital gains (25% base rate for individuals) unless the activity is a business; miners and traders may owe VAT (gov.il blocks automated checks; URL confirmed via search).
Read the original - GuidanceNot binding law
Taxation of Digital Currencies (Annual Audit Report 75A, Part 2)
מיסוי מטבעות דיגיטליים
The State Comptroller's audit of how the Tax Authority taxes and tracks digital currency gains, finding gaps in enforcement and legislation (Hebrew).
Read the original
Banks & prudential
What banks may hold, custody or issue.
- In forceApplies today
Management of Anti-Money Laundering and Countering Financing of Terrorism Risks (Proper Conduct of Banking Business Directive No. 411)
The banking AML directive; section 87A, added on 9 May 2022, sets how banks handle payment services linked to customers' virtual currency activity. The current version (No. 29, Hebrew) was issued on 30 April 2026.
Read the original - ConsultationDraft out for comment
Draft amendment to Directive 411 on payment services related to virtual currency activity
Would stop banks refusing all crypto-sourced funds, replace the automatic NIS 100,000 source-of-funds check with a risk-based test and treat licensed providers as a mitigating factor. Comments closed on 4 August 2026; not yet final as of 5 October 2026.
Read the original
CBDC & tokenised money
Central-bank digital currency and tokenised deposit programmes.
- ConsultationDraft out for comment
The Digital Shekel Technological Consultations Series
Invites vendors, technologists and academics to assess technologies that could deliver the digital shekel design. Responses were due by 30 June 2025; the Bank has not announced an issuance decision.
Read the original - GuidanceNot binding law
Preliminary Design for the Digital Shekel System
The high-level design of a possible retail digital shekel, which would not be programmable and would allow limited anonymous payments. Public feedback closed on 15 May 2025; no decision to issue has been made.
Read the original
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