The Tel Aviv Stock Exchange (TASE) has announced its plans to expand the authorized activities of Non-Banking Members (NBMs) to include trading in cryptocurrency.
Why Tel Aviv is doing it
This move is seen as another step towards the advancement and development of the Israeli capital market that aims to encourage innovation and competition while mitigating the risks and protecting customers.
Over the past year, the cryptocurrency market has experienced turmoil, which has brought material changes in Crypto activity, as more regulated institutions take part in this activity.
These turmoils emphasize the need for regulation in this sector, in view of the rapid development of the cryptocurrency sector over the recent years and the greater involvement of customers in this sector.
The proposed structure will enable the customer to deposit money that are designated for investment in cryptocurrency and withdraw monies originating from those currencies.
The NBM will contact two functions, the first, a licensed provider of cryptocurrency trading services, and the second, a licensed provider of custodial services for those currencies.
The NBM will then deposit the customer’s monies in traditional currency (NIS or foreign currency) (Fiat money) that will be deposited in an omnibus account of the NBM with the provider of the trading services.
Crypto regulation right now
The regulation and supervision of cryptocurrency service providers are still in the making. The regulation and supervision of cryptocurrency service providers are still in the making.
International authorities recommend a state regulation that will apply global standards and guidelines also to the digital currency sector.
In the state of New York, regulation over virtual currencies has already been instituted in 2015, and service providers in those currencies are supervised by the New York State Department of Financial Services.
The TASE staff prioritizes the regulation and advancement of the trading in cryptocurrency as a means to upgrading the Israeli capital market in line with international standards, as well the ability of NBMs to expand their areas of activity and the ability of their customers to trade in cryptocurrency.
This move will facilitate the development and advancement of the Israeli capital market and encourage innovation and competition, while addressing the risks that are inherent in this activity.