Over the past 6-months, middle eastern countries have witnessed a surge in crypto adoption. Israel is one of the countries where crypto transfers have increased. Last year, one of Israel’s leading banks, Bank Leumi (LUMI), began offering crypto trading. It did so via its digital arm Pepper Invest to cater to the growing interest.
Towards the end of the year, the government started tightening the regulatory screws. Israel’s Ministry of Finance published a set of recommendations pertaining to the regulation of digital assets in November.
It demanded the creation of new regulatory infrastructure and legislating licensing powers over the issuance of backed digital assets—including stablecoins. Furthermore, the proposal also recommended the transfer of supervision over digital assets “that have a significant stability or monetary effect” to the Bank of Israel.
Read More – Crypto: Israeli Regulator Proposes New Licensing, Regulation, Tax Guidelines
Israel To Formally Establish Crypto Supervision
As per reports, the Israel Securities Authority is now moving forward to create a new legal structure for crypto. Consequently, it will place them under the ISA’s purview.
Notably, the amendments to the country’s legislation will place “digital assets” under the existing securities regulations. As per the proposal, most crypto will potentially be treated as financial investments overseen by the ISA.
Meanwhile, the changes will define the assets as digital representations of value that are used for financial investment and can be transferred using a distributed ledger. Furthermore, digital assets will be added under the existing category of “financial instruments” in Israeli securities law.
These measures will shield investors, according to the agency. However, it will also allow them to enjoy the unique advantages of crypto.
The ISA’s proposal is open for public comment until February 12. Notably, it proposes a six-month period before it goes into full effect after getting a green signal. The agency also noted that regulations ought to be flexible to attune to changes with respect to crypto technology.