The central bank of Israel and various other government agencies are seeking input from the public regarding the regulation of virtual assets.
According to a statement released by the Bank of Israel, there is a need to monitor developments in the digital assets space and understand their implications on financial stability, economic activity and on the financial markets.
Per the press release, the input from stakeholders and other interested parties will be useful in formulating recommendations that will be instrumental in the drafting of regulations:
The team would like to monitor developments in this area in Israel and abroad, and to examine the issues concerning the application of regulation to the various uses of the technology and their implications for economic activity, the financial markets and financial stability. The team will gather data and information for the purpose of creating a knowledge base on the issue for regulators and the public, and in order to formulate recommendations regarding the desired regulatory policy.
Some of the key issues that the inter-agency team which consists of the Bank of Israel, the Israel Tax Authority, the Ministry of Finance, Israel Securities Authority and the Capital Market Authority among others wants public input on are the risks associated with using virtual assets. This is notable given that last month a report recommended against the issuance of a digital Shekel by the Bank of Israel on the grounds of the risks it poses to the country’s financial system.
Other issues that the inter-agency team is seeking public input on include the barriers that cryptocurrency firms face in Israel. The inter-agency team, which also counts the Israel Money Laundering and Terror Financing Prohibition Authority and the Ministry of Justice as members, also wants to find out how blockchain technology and cryptocurrencies can be used in dealing with challenges that crop up when fighting money laundering and financing of terrorism.
Additionally, the inter-agency team is interested in the kind of obstacles firms planning initial coin offerings in Israel face in their quest to fundraise in the Middle Eastern country:
What are the main barriers, regulatory or otherwise, with which Israeli parties at interest operating in the context of investing and fundraising in the area of virtual assets must deal if they wish to operate in Israel? If the company has previous experience raising funds in Israel, we would like to know what specific barriers it has encountered.
Other than the regulatory perspective, the inter-agency team sees distributed ledger technology and cryptocurrencies as being beneficial to other areas of the economy. In that regard, the team is seeking public input on the kinds of opportunities that these technologies present to the financial industry and other sectors.
Last modified: May 20, 2020 1:20 PM UTC