Israel Moves to Attract Blockchain based Solutions via Regulations

Israel Securities Authority (ISA) starts off with broad based regulation on the Fintech and crypto sectors.

Capital Markets

Anat Guetta, the chair of Israel Securities Authority (ISA) announced its plans to collaborate the professionals in fintech innovation and efforts to regulate the fintech and crypto sectors. 

Israel is moving towards a long term goal of regulating the crypto industry as the nation state believes blockchain technology has the potential to transform Israel’s capital markets. This is a continuation of the initial announcement made two years ago, an initiative to build ‘a complete digital value chain for investors’. 

In an interview with Coindesk’s Sandali Handagama on February 14, Anat Guetta said, ‍

‘We see crypto and blockchain as two separate phenomena. We see great potential for blockchain technology. Crypto activity is a separate issue that we are examining and considering how it should be supervised in a holistic way in Israel, as it should be in other areas in the world.’‍

In the interview, the former economist and banker also acknowledges that regulators are lagging behind in terms of technology. She believes that the role of ISA as the leading fintech regulator is Israel, is to balance, monitor and regulate the entire space.  

Understand and Embrace the Technology

Crypto assets are part and parcel of the blockchain ecosystem. Israel has acknowledged that the blockchain technology is part of financial innovation. In order to move forward, regulator has to first embrace the technology and ‘speak technology’ in entrepreneurs and developers in the field, according to Ms. Guetta in her address to a Securities Conference in 2020. She added,  ‍

‘We are also the first regulatory agency in Israel — and one of the first in the world — to adopt DLT technology in its core systems, the systems that are used to provide services to the public.’‍

Israel needs regulation to give a clear overview to industry players what is permissible and what is not. In her interview to CoinDesk, she alluded to the fact that blockchain companies prefer to operate outside of Israel. The state is losing these companies as an economy and as a country. 

The End Target 

The rationale is the same in whichever jurisdiction that blockchain based companies are allowed to operate. There must be a coherent and comprehensive framework of regulation to allow for institutions to operate in a legitimate and acceptable manner. Israel has its sights set to facilitate this. 

The often cumbersome effort of trying to pigeonhole crypto assets into different classes is wrong. Ms. Guetta believes that regulators ought to take crypto as a whole and implement regulatory supervision on it. 

The key takeaway from the interview is that regulation is necessary for both the industry players and investor protection. 

source : bsc.news