Israel’s crypto industry is pressing lawmakers to overhaul digital asset regulations, with research from KPMG estimating reforms could add 120 billion shekels ($38 billion) to GDP and create 70,000 jobs by 2035.
The lobbying effort, launched last week by the Israeli Crypto Blockchain & Web 3.0 Companies Forum, focuses on easing rules for stablecoins, tokenisation, and tax compliance to unlock growth in the sector.
“The Israeli public is already there and the politicians need to act,”
Said forum leader, Nir Hirshman-Rub, noting that more than 20% of Israelis currently hold digital assets, according to KPMG research.
Hirshman-Rub said 2026 is shaping up as a defining year for digital assets following the US-brokered Gaza ceasefire, arguing regulatory clarity is now critical to capitalise on rising public adoption.
An October report from Chainalysis showed Israel’s crypto inflows topped $713 billion last year, driven by sustained retail activity after the October 2023 Hamas attacks.
Industry leaders also cite banking friction as a key barrier, with Israeli banks often refusing service to crypto firms or imposing prolonged due diligence, alongside tax rules that penalise token-based employee compensation.
While a national crypto strategy has been presented to the Israeli Knesset and a voluntary disclosure regime remains open until August 2026, regulators acknowledge banking resistance continues to weigh on participation and industry growth.