The Israeli government has taken significant strides towards regulating the crypto sector by forming a special examination team to explore the regulation of decentralized governance organizations, known as DAOs. This step comes in the wake of Israel’s growing interest in cryptocu...
The Israeli government has taken significant strides towards regulating the crypto sector by forming a special examination team to explore the regulation of decentralized governance organizations, known as DAOs. This step comes in the wake of Israel’s growing interest in cryptocurrencies and aims to establish legal certainty, reduce risk factors, and unlock the immense potential of the Israeli economy in this rapidly evolving field.
Special examination team, led by the Chief Economist at the Ministry of Finance and the Head of the Corporations and Capital Market Cluster at the Ministry of Justice, will delve into the workings of decentralized autonomous organizations (DAOs) and the decision-making processes within them. DAOs, typically based on blockchain technology, employ native crypto tokens for stakeholders to vote on governance matters.
The primary objective of the team is to provide regulatory clarity on the use of tokens and associated risks within these organizations. This move is expected to foster an environment of transparency, stability, and investor protection, which will be vital for the sustained growth of the crypto sector in Israel.
The team examines the required regulation, including regarding the corporate status, the taxation aspects, and other aspects of DAO in order to create legal certainty, reduce the risk factors in the activity through DAO, and realize the potential for the Israeli economy
An excerpt from the .By establishing a clear regulatory framework for DAOs and digital assets, Israel aims to provide a conducive environment for startups and businesses operating in the blockchain space. The certainty offered by these regulations is expected to attract both domestic and international players, boosting economic activity and fostering innovation in the country.
As the public consultation period continues until September 3, 2023, stakeholders and citizens alike have a unique opportunity to contribute to the formulation of these policies. Israel’s proactive stance in embracing the evolving landscape of digital assets is a testament to its commitment to being at the forefront of technological advancement and financial innovation.
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