Israel-based crypto exchange Bits of Gold has become the first crypto firm in the country to receive a license from the Capital Markets Authority, according to social media posts from the company on Sunday.
As a result of obtaining the license, Bits of Gold will be able to store digital currencies in a secure vault in the “Bits of Gold Wallet” that they have been working on for some time. It will start providing services that allow banks and other financial institutions to connect with the digital assets.
According to Bits of Gold’s official statement, it is the next step in its desire to make the world of digital currency accessible to the people of Israel “in a simple and secure way.”
Israeli authorities are imposing restrictions on cash payments in the country as it tries to fight illegal activities and move to digital payments in the country.
However, institutional adoption in the country has lagged as Israeli banks, citing anti-money laundering (AML) issues, have been unfriendly to crypto and banning services until recently.
In the year In 2017, Israel’s Supreme Court ruled that local bank Leumi was legally allowed to offer Bits of Gold services, saying that the nature of Bitcoin (BTC) allowed the bank to comply with AML requirements.
The position of the Supreme Court in That changed in 2019, however, when Leumi decided it couldn’t block the gold account based on regulatory concerns and set an example for other cryptocurrency companies to follow.
The implementation of new AML regulations by the government in Israel has further opened the way for cooperation between banks and the crypto industry. The development sets a requirement that crypto companies must be licensed, although companies that apply for one will be granted a license to continue operating for the time being.
Related: Coinbase has entered the Netherlands with the permission of the central bank.
Another barrier to institutional adoption in Israel is its tax laws. According to a report published by crypto analytics Coincube on September 8, the country recently ranked third in crypto tax.
According to Coincub, the sale of crypto is generally subject to a capital gains tax of up to 33% in Israel and an income tax of up to 50% if the investment activity is considered business-related.
While the Capital Markets, Insurance and Savings Authority issued Israel’s first crypto license to infrastructure firm Hybrid Bridge Holdings earlier this month, Bits of Gold’s license represents the first ever granted to an active broker.