Israel's Evolution: From Startup Nation To Crypto Nation

Forbes

17 hours ago

Israel's National Committee for Crypto Strategy.
In a landmark event at the Israeli parliament, the Knesset, titled "A Crypto Strategy for Israel - A Growth Engine for the Israeli Economy," members of parliament, regulators, entrepreneurs, and industry leaders gathered to unveil the final report of Israel's National Committee for Crypto Strategy. After months of intensive work, the committee presented a roadmap aiming to transform Israel into a global crypto powerhouse — but only if the government acts swiftly.
The event highlighted both the opportunities and the challenges facing Israel's crypto sector. While the country has strong technological foundations and entrepreneurial talent, regulatory uncertainty has stalled progress and driven companies abroad. The new strategy aims to address these gaps with clearer rules, better coordination, and stronger support for innovation. The debate now centers on how quickly lawmakers can turn these recommendations into action - and whether Israel can seize this moment to shape its role in the global digital economy.
Can Israel Become A Crypto Nation?
The committee's report warns that while other countries such as the United States, Singapore and Dubai are moving ahead with proactive crypto policies, Israel is suffering from brain drain and a flight of entrepreneurs due to regulatory uncertainty. According to the report, if adopted, the crypto sector could contribute up to $120 billion to Israel's GDP over the next decade.
"If we act now and provide certainty to the industry, we can position Israel as a world leader in crypto," said Arik Pinto, former CEO of Bank Hapoalim and chairman of the committee. Knesset member Oded Forer (Yisrael Beitenu) went further, stating: "We will adopt the committee's recommendations as part of the coalition demands for the next government." MK Vladimir Beliak (Yesh Atid) echoed this, emphasizing the urgency: "Israel must adopt the public committee's report to unlock this opportunity."
Israel currently hosts around 160 crypto and blockchain companies, employing over 3,300 skilled workers and raising more than $4.25 billion to date. Despite this, the sector has faced significant challenges: in 2024 alone, the number of active companies dropped by 7.5%, and the workforce shrank by 12% - clear signs of a contracting industry.
Left to right: Arik Pinto, Nir Hirshman, MK Oded Forer, MK Vladimir Beliak and MK Dan Illouz.
The Committee's Blueprint For Crypto Nation
The committee outlined a strategic framework based on five core pillars:
The committee called on the government to adopt a smart, consolidated regulatory approach to grant entrepreneurs stability and encourage innovation. It also recommended building a national blockchain infrastructure to enable transparent governance and secure data flows.
The Deputy Chair of the Committee, Nir Hirshman, CEO of the Crypto Companies Forum and the initiator of the public committee to promote a crypto strategy for Israel, said: 'Today we presented in-depth work that can serve as the foundation for a national crypto strategy for Israel. We have an extraordinary opportunity. The talent is here, the entrepreneurs are here. The call by Members of Knesset Beliak, Forer, and Illouz for the government to adopt the committee's recommendations and advance the development of a national crypto strategy is the right course of action. This is how it worked in Europe, this is how it's working in the U.S. This is the direction we need to take, and it's how we can position Israel as a crypto powerhouse and turn crypto into a major growth engine for Israel's economy'.
Lawmakers Voice Support
Opposition Finance Committee chair MK Vladimir Beliak called the conference a "milestone in the dialogue between technological innovation and regulation," urging legislative action to remove roadblocks and make crypto a real economic engine. MK Dan Illouz (Likud) stressed that 'technologies like crypto are not a passing fad - they are the foundation of the global financial future, and Israel must not miss the train". MK Oded Forer noted that Israel's future hinges on proactive policy: "The question is not if but when. Israel can and must be the engine of the crypto industry rather than a trailing wagon."
The Deputy Chair of the Committee, Nir Hirshman, CEO of the Crypto Companies Forum, speaking in the ... More Knesset.
Industry Leaders Weigh In
Youval Rouach, co-founder and CEO of Bits Of Gold, underlined the banking bottleneck as the primary obstacle, stating, 'If we solve this, we solve 90% of the industry's problems'. Lior Lamesh, co-founder and CEO of GK8 (acquired by Galaxy), pointed out that Israel possesses world-class digital asset custody technology already relied upon by global giants, but regulation lags behind. Prof. Eli Ben-Sasson, co-founder and CEO of StarkWare, urged immediate action to retain Israel's global leadership in cryptographic research, while Prof. Benny Pinkas (Bar-Ilan University and formerly Cryptographer at Aptos) called for leveraging Israel's unique cryptographic talent to build local jobs instead of exporting value abroad.
Israel's Road Ahead
The crypto debate in Israel is ultimately a test of the country's ability to adapt and lead in an era defined by rapid technological disruption. In the past, Israel has shown time and again that it can transform big ideas into global industries - from cybersecurity to autonomous vehicles to medical innovation. Yet crypto presents an even more complex challenge: it sits at the intersection of finance, technology, policy, and national security.
Seizing this opportunity means more than passing new laws or tweaking tax codes. It requires cultivating a mindset that welcomes experimentation and is willing to take calculated risks. It demands a commitment from policymakers to understand the nuances of decentralized technologies and to engage directly with entrepreneurs rather than treat them as adversaries. It also means investing in education and workforce development so that the next generation of Israeli talent is equipped to thrive in a decentralized digital economy.
If Israel can rise to meet this moment, it has the potential to not just participate in the global crypto landscape, but to shape its rules, standards, and innovations. On the other hand, hesitation or half-measures will send a clear signal to founders and investors that Israel is content to watch from the sidelines. At its core, the path forward is about reaffirming Israel's identity as a fearless innovator - a nation that doesn't wait for the future to arrive but actively builds it. The decision is no longer whether to engage, but how boldly and how fast.