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Bank of Israel releases guidelines for cryptocurrency deposits

Bank

TL;DR Breakdown

  • The Israeli Central Bank publishes a guideline draft for crypto deposits.
  • The Israel Securities Authority to hosts a hackathon on March 24th. 

As cryptocurrencies continue to grow, so do the rules designed to regulate them. The crypto market is constantly changing, which makes keeping up with the regulations in different international locations difficult.

The Bank of Israel has published proposed rules that would potentially open up the country’s financial system to cryptocurrency businesses. They will now be required to study each firm individually rather than applying blanket rejections.

Bank of Israel furthers crypto adoption

The draft, which can be found on its official website, states that banks must do risk analyses. In addition, they must establish rules and processes for virtual currency transfers, both coming in and going out. Banks in the country may be unable to reject outright fiat deposits originating from cryptocurrency transactions.

Moving forward, Israeli banks must identify the source of the cash used to purchase cryptocurrency. They’re also required to trace the path of virtual currency as it travels from one person to the next from the time of its purchase until its conversion to fiat money and deposits into a bank account.

The bill aligns with anti-money laundering (AML) regulations that came into force in November. According to Israeli crypto enthusiasts, banks had previously taken a piecemeal approach to receive deposits in cryptocurrencies. However, they remained optimistic that new laws would make it easier for banks to accept cryptocurrency users.

The draft amendment is available for public comment. Following a discussion of the Advisory Council on Banking Matters’ comments and feedback, a final guideline will be prepared based on input from the Advisory Council on Banking Matters and the general public.

Israel Securities Authority hackathon this March

Regulators worldwide are increasing AML measures and compliance to prevent cryptocurrencies from being utilized for money laundering. In the European Union, lawmakers attempt to give their new AML authority tighter monitoring over virtual currencies.

The Israel Securities Authority (ISA) has ambitious goals for regulating the country’s fintech industry. In March 2022, it will be hosting a fintech hackathon as a first step; it will be the first of its kind in Israel.

The Israel Securities Authority is hosting a hackathon to find innovative blockchain-based solutions that can help improve the country’s infrastructure for securities and sovereign debt trading.

The ISA has joined with the Israeli Ministry of Finance, Start-Up Nation Central, and technology providers like VMware, Digital Asset, and Algorand to host the onsite hackathon in Tel Aviv on March 24, 2022.

Anat Guetta, chairwoman of the ISA, says that the blockchain hackathon is part of a larger initiative to work with professionals in fintech innovation. The ISA also wants to gather the expertise and influence needed to regulate the fintech and crypto sectors more broadly.

On the subject of regulating crypto deposits, Supervisor of Banks Yair Avidan said, “The Banking Supervision Department is monitoring activity in virtual currencies as well as domestic and international regulation being developed in this field. In view of the increase in customers’ activity volumes in such currencies, and due to the potential for streamlining payments and international transfers, this draft regulation was formulated.”

Avidan added, “Activity in virtual currencies comes with high risk in terms of the money laundering prohibition and the prohibition against the financing of terrorism. As such, this draft regulation sets out a number of principles for managing such risks, which will help banking corporation customers who wish to realize the money that originates in virtual currency activity, while managing the risks inherent to the banking system as part of such activity.”

Florence Muchai

Florence Muchai

Florence is a crypto enthusiast and writer who loves to travel. As a digital nomad, she explores the transformative power of blockchain technology. Her writing reflects the limitless possibilities for humanity to connect and grow.

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