An Israeli crypto industry forum has launched a lobbying effort for regulatory reforms it says could add $38.4 billion to the national economy and create 70,000 jobs by 2035. Citing KPMG research, forum leader Nir Hirshman-Rub stated broad public support exists for relaxed stablecoin rules, simplified taxes, and tokenization laws.
The Israeli Crypto Blockchain & Web 3.0 Companies Forum launched a lobbying push for regulatory reforms last week. According to KPMG research, these changes could add $38.4 billion to Israel’s economy by 2035. Forum leader Nir Hirshman-Rub said the proposals have broad public support.
Hirshman-Rub said 2026 is seen as a defining year for the industry. He stated more than 25% of Israelis have had crypto dealings in the past five years. “The Israeli public is already there and the politicians need to act,” Hirshman-Rub said.
An October report from Chainalysis showed the country’s crypto economy saw steady growth. Inflows topped $713 billion last year, with volumes spiking after the October 2023 attacks.
Israeli companies like Fireblocks and Starkware are global leaders and forum sponsors. According to NGO Startup Nation Central, over 160 local companies have attracted significant investment. These firms employ more than 2,500 people, primarily near Tel Aviv.
Hirshman-Rub highlighted banking access as a major barrier for crypto firms. He said banks refuse service or impose impossible conditions on companies dealing with digital assets. This includes demanding guarantees that crypto-sourced funds will not be deposited.
The forum also targets a tax rule penalizing token distribution to employees. Tokenized options are taxed at a 50% rate, while traditional stock options pay 25%. This disparity creates a significant disincentive for employee compensation in the sector.
A National Crypto Strategy Committee presented an interim report to parliament in July. The report outlined a strategic framework built on five pillars, including a unified regulator and banking integration. This provides a potential roadmap for legislative action.
The Israel Tax Authority implemented a new Voluntary Disclosure Procedure in August. The procedure offers immunity from criminal proceedings for disclosing unreported income, including from digital assets. However, participation has so far fallen short of expectations.
Tax Authority director Shay Aharonovich acknowledged the banking issue affects disclosure. “There is no doubt that this also affects the willingness to make voluntary disclosure, because in the end people do not just want to pay the tax, but to use the money,” he stated. The authority remains committed to the initiative through August 2026.
