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(LifeSiteNews) — As of Monday, Israel banned the use of cash for payments above $1,700 to businesses and for payments above $4,360 between private citizens.

The new law, which Israel’s Tax Authority says is designed to fight money laundering and tax non-compliance, requires that digital payments and credit cards be used instead of cash and bank checks for sums of money above the new limits, The Jerusalem Post reported.

Transactions will be considered private if they occur between citizens “who are not listed as business owners,” according to the Post.

Previously, business deals could involve cash payments of up to $3,200.

“We want the public to reduce the use of cash money. The goal is to reduce cash fluidity in the market, mainly because crime organizations tend to rely on cash. By limiting the use of it, criminal activity is much harder to carry out,” Tamar Bracha told The Media Line. Bracha is charged with implementing the new law on behalf of Israel’s Tax Authority.

Uri Goldman, an attorney who represented clients in a 2018 appeal against the law, told The Media Line there is evidence that calls into question whether the law is effective at achieving its stated goal.

“The data we brought showed that since the first phase of the law was in effect, the amount of cash on the market only increased. So clearly something’s not working,” Goldman said.

Another problem, Goldman said, is that “when the bill passed, there were over a million citizens without bank accounts in Israel. The law would prevent them from conducting any business and would, practically, turn 10% of the population into criminals.”

Goldman told Israeli media that the law “primarily impacts people such as plumbers and handymen, as well as small landlords,” according to The Business Standard.

The law makes temporary exemptions for charitable institutions and for trade with Palestinians from the West Bank who are not Israeli citizens. Bracha explained that these exceptions are merely transitional so that they have time to change their payment methods.

The Counter Signal noted that Israel “has been at the forefront of adopting ‘digital ID’ and digital currency technology,” having been one of eight countries that formed the Digital Identity Working Group in 2020 “to discuss how to implement a global digital identity system for trade and travel.”

Thus, digital payments by Israelis can be tethered to a digital identity that incorporates biometric data.

Citing similar digital ID implementation in Canada, The Counter Signal remarked, “It’s clear that a precedent has been set, and Israel and the Western world are edging closer toward a cashless digital surveillance state from which there may be no return.”