Israel’s Government Forms Pioneering Team To Enhance Monitoring DAOs

Key Points:

• Israel forms team to regulate DAOs and seeks public input.
• Focus on exploring DAO activities and crypto token usage.
• Initiatives aim to attract investments and foster crypto sector growth.

In a bid to explore and regulate decentralized governance organizations, known as DAOs, the Israeli government has established a special examination team. This team, headed 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 be soliciting public input on the matter until September, according to an official announcement.

The primary focus of this special examination team will be on the applications and various activities conducted by decentralized autonomous organizations (DAOs), as well as the decision-making processes within them. DAOs, which are often blockchain-based, utilize native crypto tokens to enable stakeholders to participate in governance matters. The team aims to delve into the use of these tokens and assess the associated risks, ultimately aiming to provide regulatory clarity in this evolving landscape.

“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,” stated the official notice.

The feedback and comments received from the public will play a significant role in shaping the team’s policy recommendations.

Israel has been actively pursuing regulatory frameworks for the cryptocurrency sector to bolster industry growth. Recently, lawmakers demonstrated support for the elimination of capital gains taxes for foreign crypto investors. However, in line with other jurisdictions, such as the European Union, Israel is also considering tighter measures for specific crypto assets like stablecoins, following notable collapses in 2022.

Notably, earlier this month, Israel’s parliament passed legislation granting tax breaks to the crypto industry on par with those enjoyed by high-tech enterprises. The new measure aims to halve the tax on cryptocurrency options, aiming to attract international investments to Israel. By taking proactive steps to regulate the digital asset market and provide tax clarity, the country seeks to foster a conducive environment for the burgeoning crypto sector.

The Israeli government’s move to examine and regulate DAOs comes as the technology and its potential implications continue to garner attention globally. As the consultation process continues until September, stakeholders and the public at large eagerly anticipate the development of a well-considered regulatory framework that will strike a balance between fostering innovation and safeguarding investors’ interests.

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