Israel’s government has rolled out new restrictions on cash transactions which will take effect August 1st, lowering the cap from NIS 11,000 ($3,200) to NIS 6,000 ($1,745). Between individuals, the limit on cash transactions is being lowered from NIS 50,000 ($14,545) to NIS 15,000 ($4,360). The law also applies to cash equivalents.
An Israeli citizen purchasing a product or service that costs more than $1,745 can pay up to $1,745 or 10% of the price, in cash, whichever is lower. The business must register the payment and note how much was paid in cash. Similarly, a transaction between individuals can be paid in cash up to $4,360 or 10% of the price, whichever is lower.
Citizens who purchase an item or service that costs more than the cap and skirt the law by making more than one cash payment, each one lower than the cap may be imprisoned for up to three years.
According to Globes, the law will mainly impact the working class, such as handymen, plumbers and electricians, in addition to small landlords and furniture businesses.
Offenders will be fined 10%-30% of the transaction, depending on the amount and nature.
The state is also working on legislation that will place limits on the amount of cash private citizens can keep at home. The cap would be placed at NIS 200,000 ($58,185), even in foreign currency. Suspicion of an offense would be grounds for a search warrant.
But even if a citizen holds less than $58,185, they are still required to report it to the Israel Tax Authority and explain the source of the funds.
Citizens would be allowed to keep up to NIS 50,000 ($14,545) without having to report it.
While the State of Israel mentions money laundering and tax evasion as justifications for these laws, they are not the only factors. The government also aims to control how citizens spend their money and ultimately phase out cash altogether, allowing only digital payments.
“The Law for the Reduction in the Use of Cash was designed to change the public’s consumption habits and encourage a switch to digital means of payment, with a view to almost complete replacement of the use of cash in the future,” reports Globes.
Economist Dr. Pippa Malmgren, who was named one of the WEF’s Global Leaders of Tomorrow, outlined the “new world order” at the World Government Summit in March.
“What underpins a world order is always the financial system,” said Malmgren.
“And what we’re seeing in the world today, I think is we’re on the brink of a dramatic change, where we’re about to – and I’ll say this boldly – we're about to abandon the traditional system of money and accounting, and introduce a new one,” Malmgren added, smiling.
She went on to explain that the new financial system would be digital.
“And the new one, the new accounting, is what we call ‘blockchain’. It means digital, it means having an almost perfect record of every single transaction that happens in the economy, which will give us far greater clarity over what’s going on.”