yes it could be, but this is very different from what is done by japan country.
in japan, bitcoin has been regarded as a legitimate payment currency, but all countries have their own rules. and if in israel bitcoin is considered an asset, not a currency
then every bitcoin user in israel must obey the rules

Each country will decide on their own classification of bitcoin, normally falling somewhere between currency and asset. It's weirdly neither and both at the same time in my opinion.

As for regulation, it will differ depending on the classification given to it but this will again be on a country by country basis. I do not know much about Israel but if you look in to Israel's regulation on assets then it should be the same for bitcoin given they've classified it as an asset.

Does it really matter if they consider it money, currency, asset, commodity, poop, or fairy dust? It really does not, all that matters is the tax rate and whether or not they are going to tax it, simple as that. Figure out how much you owe and pay that taxman!

Treating it so seems like the most realistic option. You don't make profits out of your domestic currency. You can with foreign currencies and assets. BTC fits the criteria of both. Whether people own up to those profits is another matter.

Not just Israel, but even USA regulators said the same thing about bitcoin and legally termed it as a property asset instead of a currency, which is certainly wrong. Since bitcoin is an asset in Israel, it will be subject to capital gains tax. There are two basic types of capital gains tax, one is long term and another one is short term. The term depends on the holding period of bitcoin. I am not sure about the Israel tax bill or the regulations. But these are the basics. So government want to encourage you to hold bitcoin as an investment instead of using it for goods and services.