Tel Aviv Moves to Allow Cryptocurrency Trading

The Tel Aviv Stock Exchange, or TASE, is planning to expand its authorized activities to offer non-bank sector customers the ability to trade crypto. TASE operates Israel’s only public equity platform.

The draft approval in which TASE is taking steps to introduce digital asset trading activities has been posted for public comment based on recent announcements. The first announcement was made on February 27, stating that the proposed structure would allow customers to deposit fiat currency, which could be used to invest in digital assets.

TASE’s regulatory initiative to expand the list of authorized services for non-banking institutions (NBIs) is now open for public comment.

NBMs are primarily intermediaries that provide brokerage, investment and advisory services. NBMs can process various transactions that include the transfer of funds, but they are not authorized by law to accept direct deposits from customers or even act as custodians.

TASE specifically talked about how customers will be able to deposit fiat currencies to trade cryptocurrencies; similarly, customers will also be able to withdraw their funds after selling their cryptocurrencies.

The functioning analysis of this system is, however, still complicated, and little about it has yet been revealed. It is mentioned that TASE is continuously working to ensure that the trading process remains secure with adequate consumer protection.

If this new proposal is approved, NBMs will be licensed providers of cryptocurrency and custody services. Until then, client funds must be transferred to an “omnibus account”, which will act as an intermediary in cryptocurrency trading activities. The previous year, Tel Aviv banking institution Bank Leumi had already started offering crypto trading services to clients in partnership with Paxos.

Growing Demand for Cryptocurrencies

In the press release, TASE goes on to talk about all of the unfortunate events that have taken place in the cryptocurrency industry over the past year and how they continue to affect the space.

He also points out that, despite the risks involved in the sector, customers have been demanding cryptographic services, which now require the presence of regulated institutions. TASE believes that the involvement of these institutions will help to reduce the risks associated with the virtual asset industry.

He stated that the proposal has not yet been presented and, once presented, it will depend on the approval of the Board of Directors,

This is another step in the advancement and development of the Israeli capital market, which aims to encourage innovation and competition, mitigating risks and protecting customers.

Where are the Israeli regulators?

Israel has maintained a positive stance towards cryptocurrencies as a participating nation. With countries working on cryptographic regulations around the world, the Israeli government is also moving towards the same goal.

Last November, Israel’s Ministry of Finance issued its own guidelines for regulating virtual assets. It published its recommendations on the regulation and oversight of cryptocurrency and stablecoin activities in a report entitled “Regulation of the Digital Asset Industry: Roadmap to Policy”.

Earlier this year, the Israel Securities Authority (ISA) released a draft proposal defining the legal status of cryptocurrencies. The report talked about how Israeli regulators are trying to impose regulations on digital assets, ensuring that these regulatory policies are not too different from those imposed on non-digital assets.

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