Earlier this week, on Monday, February 27, the Tel Aviv Stock Exchange (TASE) published a draft seeking regulatory approval to facilitate cryptocurrency trading on its platform.
The license is primarily aimed at expanding the authorized activities of Non-Bank Members (NBMs) to include trading in digital assets. Last year, banking institutions such as Bank Leumi already started offering cryptocurrency trading services in agreement with Paxos.
Now, other players are also looking for licenses that allow them to trade digital assets. In its announcement, TASE proposed a structure that will allow customers to deposit fiat money designated specifically for cryptocurrency investments.
If regulators approve this proposal, non-bank members will act as authorized providers of cryptocurrency custody and trading services. All client funds will be placed into an “omnibus account” which will serve as an intermediary for all cryptocurrency trading activities.
It would also allow customers to withdraw funds by selling cryptocurrencies. However, this process is still a bit complex so far. The announcement notes that this is done specifically to address consumer protection and risk mitigation.
Will regulators in Israel move?
Israel has been one of the leading nations in terms of cryptocurrency participation. With global cryptocurrency regulation coming into effect, regulators in Israel are also making a move. In November 2022, the Chief Economist of the Israeli Ministry of Finance released a report: “Regulation of the Digital Asset Sector: Roadmap for a Policy”.
This report seeks to impose regulations on financial activities and services on digital assets that will be similar to those that currently apply to non-digital assets. The Tel Aviv Stock Exchange is aware of the developments and is therefore taking appropriate action. In their press release, they state:
“The TASE team prioritizes regulating and advancing cryptocurrency trading as a means of improving the Israeli capital market in line with international standards, as well as the ability of NBMs to expand their areas of activity and the ability of their clients to trade. in cryptocurrencies”.
TASE believes that aligning local and global regulations will attract more foreign investment into Israel’s crypto market. This will ensure further advancement of Israel’s capital market while promoting innovation and competition.