Source: Freepik
Key Takeaways
- Cryptocurrency adoption in Israel is growing steadily, with Statista projecting 3.65 million users in the market by 2025.
- Crypto adoption in Israel is concentrated in urban centers like Tel Aviv, while rural areas lag in accepting cryptocurrency payments.
- A diverse range of businesses, including restaurants, dental clinics, optical stores, and jewelers, accept cryptocurrency.
- Tools such as crypto wallets, payment platforms, crypto cards, and Bitcoin ATMs make it convenient to store, manage, and spend cryptocurrency in Israel.
- Cryptocurrency transactions are taxable in Israel. Businesses and individuals must report transactions and comply with regulations to avoid penalties.
An Overview of Crypto Spending in Israel
Cryptocurrency has evolved from a niche concept to a widely accepted method for purchasing goods and services globally. It’s no surprise that cryptocurrencies like Bitcoin, Ethereum, and stablecoins are gaining ground in everyday transactions, even in countries like Israel.
Israel, often called the “Startup Nation,” is renowned for its innovation and tech-savvy culture. Its adoption rate of digital currencies is on the rise and Statista projects an increase of users to 38.61% by 2025
“By 2025, the number of users in the Cryptocurrencies market in Israel is anticipated to reach 3.65 million users.”
The number of businesses in Israel that accept cryptocurrency is still limited, and participation fluctuates based on industry developments. However, the range of businesses that accept virtual currencies is diverse, including professionals like lawyers, service providers in communications, electronics, and engineering, as well as cafes, restaurants, optical stores, and auto dealerships.
Businesses in Israel have different approaches to handling cryptocurrency payments. Some retain the crypto they receive, while others convert it into Israeli shekels. For businesses that choose conversion, the transaction process often includes a payment pipeline, comparable to credit card processing services. This ensures that businesses receive the equivalent amount in shekels while the customer pays in crypto.
Tax regulations also apply to these transactions, requiring businesses to report them as taxable income, with customers receiving invoices in shekels.
Read Also: Best Places to Spend Crypto in Austria
Best Places to Spend Crypto in Israel
| S/N | Best places to spend crypto in Israel | Category |
| 1. | Only Mattresses | Home Goods |
| 2. | Dr. Itelman Dental Clinic | Health |
| 3. | JB Jewelers | Jewelry |
| 4. | Itzik Grilled Chicken | Food and Drinks |
| 5. | Dana Gilad | Jewelry |
Only Mattresses
Only Mattresses, a virtual store based in Nadav Halivah, offers a wide range of high-quality mattresses. It was created to provide customers with a reliable and professional shopping experience. The store also accepts Bitcoin for a seamless and modern payment experience.
Dr. Itelman Dental Clinic
Dr. Itelman Dental Clinic is a Tel Aviv dental clinic located in Ramat HaHayal. They provide advanced dental treatments, including injection-free anaesthesia, dental lasers, and innovative procedures without anaesthesia. Patients can enjoy top-notch dental services with the added convenience of paying in Bitcoin.
JB Jewelers
JB Jewelers is a family-owned business with four generations of expertise in fine jewelry and luxury watches. They offer an exclusive line of original designs alongside internationally renowned brands of jewelry, watches, and accessories. Customers can pay using Bitcoin, making them a great choice for jewelry lovers who prefer crypto payments.
Itzik Grilled Chicken
Itzik Grilled Chicken in Tel Aviv-Yafo serves flavorful grilled chicken dishes, cooked over an open flame for a rich, smoky taste. With a menu that includes sides like salads and rice, it’s a go-to spot for a hearty meal. Whether dining in or ordering for delivery, customers can enjoy their meals and conveniently pay with Bitcoin.
Dana Gilad
Dana Gilad is a luxury jewelry brand founded in 2018. They specialize in engagement rings and designer pieces made from carefully selected materials. They also accept Bitcoin as a means of payment.
Popular Tools Used for Spending Crypto in Isreal
Source: Freepik
Crypto wallets
Crypto wallets are used to store and manage cryptocurrency. Hot crypto wallet allows users to make quick and convenient transactions and is commonly used for paying merchants that accept Bitcoin, Ethereum, or other cryptocurrencies. In contrast, cold wallets secure offline storage, ideal for users who want to safeguard their funds while still being able to access them for occasional spending.
Crypto payment platforms
Payment platforms like UPay enable users to buy, sell, and sometimes directly spend crypto through its integrated tools. Israeli businesses seeking to expand their payment options could also embed into their online and offline systems these payment gateways.
Crypto cards
Crypto cards offer another convenient method for spending cryptocurrency. These cards, such as the Upay Card, allow users to convert crypto into fiat currency at the point of sale. They are widely accepted by businesses across Israel that support Visa or Mastercard. This makes it easier for users to spend their cryptocurrency in regions with limited adoption.
Bitcoin ATMs
Bitcoin ATMs provide a straightforward way to access and manage cryptocurrency, especially for those looking to convert digital assets into spendable funds. These machines enable users to transfer cryptocurrency to a digital wallet or withdraw cash equivalent to the crypto value. Bitcoin ATMs in Israel are commonly found in urban centers like Tel Aviv and Jerusalem.
Tips for Spending Crypto in Isreal
Source: Freepik
Check Tax Obligations
Always consult with a tax professional familiar with cryptocurrency laws in Israel to understand how your crypto activities are classified. Make sure to comply with their tax requirements to avoid hefty penalties. You can also use software to track and report transactions accurately.
Use Crypto Directories
Platforms like CoinMap or similar crypto directories can help locate businesses and service providers that accept cryptocurrency. This is particularly useful when traveling or seeking specific services. For travelers, these directories ensure they can locate services without resorting to traditional currency exchanges, which often come with high fees.
Diversify Storage Solutions
Make sure to use secure wallets, including hardware wallets, to minimize hacking risks, UPay, protected by top-tier security features, is a reliable platform to safeguard your funds. You can also employ multi-signature wallets for added protection and consider insurance options available for crypto assets.
Stay Informed About Regulations
Regulations around cryptocurrency are fluid in Israel. In 2024, the Israel Securities Authority proposed stricter rules for crypto trading platforms, requiring them to register as financial service providers. Staying informed about these developments can help avoid legal complications.
Challenges of Spending Crypto in Isreal
Source: Freepik
High Taxation
Israel imposes a complex and burdensome tax structure on cryptocurrency. Taxes include capital gains (25%), income tax (10% – 50%), value-added tax (17%), corporate tax (23%), and a 3% high-revenue tax for certain cases.
This unpredictable and overlapping tax burden discourages crypto usage and makes compliance challenging. Businesses and individuals must carefully track transactions to ensure accurate reporting and avoid penalties.
Adoption Barriers Outside Major Cities
Crypto adoption is still uneven across Israel. While Tel Aviv has a more vibrant ecosystem with businesses accepting cryptocurrencies, other areas lag. In rural or less urbanized areas, cryptocurrency is rarely recognized as a payment method. This limits spending opportunities for crypto holders traveling or living outside metropolitan areas.
Read Also: Best Places to Spend Crypto in Bulgaria
Conclusion
Cryptocurrency is gradually becoming a more accepted and integrated method of payment in Israel, a country known for its innovative spirit and tech-savvy population. As the number of crypto users in Israel is projected to grow significantly by 2025, it’s clear that the nation is embracing the digital currency revolution.
While the number of businesses accepting cryptocurrency remains relatively small, there is a growing diversity in industries open to adopting digital payments, ranging from professionals like lawyers and service providers to restaurants, cafes, and even dental clinics. This reflects a gradual shift toward broader cryptocurrency acceptance, particularly in Tel Aviv, which boasts a thriving ecosystem of businesses that accept crypto payments.
However, challenges such as high taxation, security concerns, and uneven adoption across the country still hinder widespread use. Despite these obstacles, Israel’s crypto landscape shows promise. With the continued rise of digital payment solutions and a growing number of businesses integrating cryptocurrency into their payment systems, the future of crypto adoption in Israel looks bright.
To make the most of this evolving ecosystem, it’s essential for crypto users to stay informed about regulatory changes, utilize secure tools for managing and spending their digital assets, and be mindful of tax obligations to avoid penalties.
FAQs
Yes, cryptocurrency transactions in Israel are taxable. Businesses must report income from crypto payments, and individuals may need to pay capital gains tax or other applicable taxes.
You can use crypto directories to locate crypto-friendly businesses and services across Israel.
Cryptocurrency is gradually gaining traction in Israel, but adoption is mostly concentrated in urban centers like Tel Aviv.
Popular cryptocurrencies like Bitcoin, Ethereum, and stablecoins are the most widely accepted for transactions in Israel.
Yes, tourists can use cryptocurrency for payments in Israel, especially in major cities. However, it’s advisable to carry an international crypto payment card like UPay or use tools like crypto wallets for seamless transactions.
Spending cryptocurrency in Israel is generally safe, especially with reputable businesses. However, users should use secure wallets, be aware of scams, and stay informed about cybersecurity risks.
