ISA Embracing Blockchain Technology
Blockchain technology is finally being embraced by the Israeli Securities Authority. This comes after a significant nationwide promotion for the adoption of digital securities. This information was confirmed by the Global Times on Tuesday, January 14th, 2020. They noted that the recommendations for blockchain technology has been compiled in an ISA Draft Report and will be publicly released next week. An ISA-appointed committee was created to institutionalize digital markets and promote the growth of cryptocurrency in Israel. It should be noted that the Israeli Securities Authority has been standoffish against this decade-old technology. The ISA now believes that blockchain has the potential to advance capital markets in Israel.
The Deputy Director of Supervision for the ISA, Orly Koren, spoke on behalf of this agency. He stated to the Global Times publication: “The committee focused on its work on digital platforms for offerings, trading, and clearance of securities using distributed ledger technology [DLT].”
Developing the Industry
Growing the Israeli Blockchain Market won’t be challenging for the ISA. Global Times noted that this commission would release a global advertising campaign, which will call for companies working in the industry to establish themselves in Israel. The ISA’s official statement to the times reads: “We invite the public to raise regulatory issues concerning the promotion of markets using innovative technology, particularly issues that they believe are likely to constitute an obstacle to the development of this sector in Israel.”
The appointed committee operating under the ISA are determining which regulatory challenges will be revealed. Subsequently, the legislation will be altered in anticipation of these potential challenges. The Israeli Securities Authority confirmed that a required standard would be implemented, which will include the protection of customers and investors. This will extend to anti-money laundering policies and stability platforms. Their legislation will be similar to the European Union, forcing a regulated and legalized market onto operators.
The Tel Aviv Region has become a technology haven for thousands of corporations, with numerous blockchain companies scouting the area for potential developments. However, previous legislation wouldn’t allow for blockchain companies to acquire licenses. This didn’t stop a substantial surge of 32% in Israel, with hundreds of blockchain corporations being operational. Most of these companies work around loopholes in Israeli Financial Legislation, allowing them to operate in a grey zone. The ISA can provide Legally-tendered licenses going forward.