Israel restricts the use of cash to stimulate digital payments

The Israeli authorities have announced tighter restrictions on the use of cash — all to encourage digital payments and fight money laundering.

As it became known, on August 1, the restrictions on cash payments in Israel were increased to 6,000 NIS ($ 1,760) for business transactions and 15,000 NIS ($ 4,400) for personal ones. The government has promised that in the future it will introduce additional restrictions prohibiting the storage of more than 200,000 new shekels ($ 58,660) in private homes. However, it is not yet known how this process will be legally controlled.

According to representatives of the Israeli Tax Authority, the restriction on the use of cash will make it more difficult to finance criminal activities, as illegal organizations mostly use cash. The new restrictions are also considered a good sign for the future implementation of CBDC in the country.

As a reminder, Israel is favorably disposed to digital currencies and is considering the possibility of introducing a national crypto shekel. The CBDC project was first considered by the central bank of Israel at the end of 2017. A year later, a research group recommended suspending the project, but in May 2021, the Central Bank of Israel revived the idea. Also recently, the bank’s representatives reported that the feedback from the public and stakeholders on the project was mostly positive.