According to Israel’s top economist, the supervisor of financial service providers and the Israel Securities Authority should be given additional authority to regulate the sector. To securely increase crypto usage, Israel’s chief economist has provided legislators with proposals to approach the nation’s laws governing digital assets.
According to the 109-page report delivered to the Minister of Finance on Nov. 28, the need for a more thorough regulatory framework that would bring trading platforms and cryptocurrency issuers into compliance and increase the authority granted to its financial regulators is of the essence.
According to Greenberg, Israel should strengthen investor protection and certainty by requiring cryptocurrency issuers and trading platforms to obtain stricter licenses and by ensuring that funds derived from digital assets are managed more securely. Additionally, she suggested giving the Supervisor of Financial Service Providers additional authority to monitor licensing regulations and create a more thorough taxation structure for purchasing and selling digital assets.
Greenberg also advocated for the Israel Securities Authority to be given more authority, saying that such authority is necessary to determine if a digital asset is subject to Israeli securities regulations and to keep track of payment service providers’ activities in the cryptocurrency industry.
Additionally, she mentioned the necessity for separate stablecoin issuer license and oversight requirements, as well as the need to create an inter-ministerial commission to review and manage blockchain-based decentralized autonomous entities in terms of legislation (DAOs). She continued by saying politicians and policymakers needed to create legislation about digital assets while keeping in mind the idea of technology neutrality.
The report, according to Israel’s Minister of Finance Avigdor Lieberman, constitutes the most comprehensive and up-to-date report currently available on this issue for government use, and he anticipates that it will serve as a basis for future decisions and legislation on issues relating to digital assets in the months to come.
Is Israel giving cryptocurrency a chance?
Despite Israel being frequently described as a technologically advanced country, the country hasn’t yet demonstrated a strong interest in cryptocurrencies, placing 111th out of 146 nations in a recent global cryptocurrency adoption index conducted by blockchain analytics company Chainalysis.
Additionally, according to data cited by Greenberg in her analysis, Israeli citizens have only been involved in 21 million blockchain-based transactions or 0.04% of all cryptocurrency transactions globally.
Government-issued licenses are also being issued, with Israeli trading platform Bits of Gold becoming the first company to do so in September 2022. This license will allow Bits of Gold to store digital currencies through their secured custody wallet and offer specific services to banks related to digital assets.