Israel Crypto Industry Pushes Regulatory Changes Amid Strong Public Support
Natalia Ivanov2026-02-16
Israel’s crypto industry launches a lobbying campaign to reform digital asset regulations, aiming to boost innovation, create jobs, and strengthen the economy by 2035.
Lobbying Campaign Kickoff
The Israeli Forum for Companies in Cryptocurrency, Blockchain and Web 3.0 began a lobbying campaign on February 3, 2026 in Tel Aviv.
Nir Hirshman-Rub, who leads the Forum, stated that the goal of this initiative is to reform regulations on digital assets.
The lobbying campaign is being launched with the goal of leveraging 2026 as an opportunity for the digital asset industry following a US brokered ceasefire in Gaza.
KPMG Economic Forecast
KPMG predicts that the proposed reform will contribute 120 billion shekels to Israel’s economy (approximately $38.36 billion) by 2035 as a result of these changes creating, directly or indirectly, approximately 70,000 jobs.
These figures suggest there is significant potential for growth in the digital asset sector.
Figure 1 illustrates the expected economic consequences of proposed cryptocurrency prohibition reforms in Israel with respect to order. The source of the information presented in Figure 1 was TradingView.com.
Key Reform Areas
Advocates are seeking more flexible regulations concerning stablecoins and tokenization of assets in order to promote innovation across the industry. Advocates' other requests include simplifications to the tax obligations to allow for businesses to be able to use the full effects of proposed reform, and a single regulator combined with clearer rules governing the issuance of cryptocurrencies.
Public and Industry Support
More than 25% of Israelis have interacted with cryptocurrency in some fashion within the last five years, indicating a strong public interest in cryptocurrencies. Meanwhile, greater than 20% have possession of cryptocurrency in the current time period, illustrating that cryptocurrency is now part of the mainstream market according to proponents of reform. Despite these examples of support for reforming the prohibition against engaging in virtual currencies, industry leaders indicate the banking restrictions currently imposed and taxation issues present difficulties or obstacles to these types of reform from becoming a reality.
Figure 2: Illustration of crypto reforms breaking barriers in Israel. Source: airdrops.com.
General Regulatory Details
The National Cryptocurrency Strategy Committee issued a draft report to the Knesset in July 2025 to assess future cryptographic developments. This document states that there are several projects already underway to create strategies for banks to accept cryptocurrencies. The documents indicate an estimated $713 billion of global capital was invested in cryptocurrency markets in 2023.
Outlook
Going forward, the successful implementation of these proposed reforms could result in positioning the State of Israel as a cryptocurrency innovation hub. The decisions made by policymakers will play a critical role in how the industry will be shaped and the needs of both the industry and the public will be met. The ongoing discussions on X provide an optimistic outlook on future change.
