Israel Determined to Regulate Cryptocurrencies

March 23, 2019

The Israel Securities Authority (ISA) earlier this month suggested the development of a platform for cryptocurrency trade under enhanced regulation. The suggestions were made in its report, following nearly two years of research on digital currencies.

The Israeli securities market regulator believes the platform would enable companies to raise money through the issuance of digital tokens to investors. However, the timeline for the development of this specialist platform has yet to be confirmed.

ISA chief Anat Guetta noted, “The excitement that defined the field in 2017 has cooled off, but the technology is here to stay.” She called on companies and the parties in the sector “to maintain direct, continuous, and long-term contact with us in order to facilitate the sector’s development.”

The statement made reference to distributed ledger technology (DLT), which supports virtual currencies like Bitcoin and is now being utilized by organizations raising money with digital tokens as an alternative to traditional stock.

Apart from its recommendation to create a well-regulated cryptocurrency trade channel, the agency pointed out that the already-existing securities legislation should be applied to digital and electronic assets like securities tokens and cryptocurrencies.

The ISA also suggested the creation of a regulatory sandbox capable of handling cryptographic asset offerings, and accompanying entrepreneurs in this format.

According to Guetta, “Technological innovation can potentially streamline, improve, and enhance competition in the capital market and the entire economy. However, she added that innovation must “really [serve] the investors’ interests.”

The ISA report also talked about other exchanges in London and Australia, noting that they are looking into similar options.

Elsewhere, the National Legislative Assembly of Thailand earlier this year passed the draft Securities and Exchange Commission Act into law, allowing companies to issue tokenized securities. Meanwhile, businesses in Germany’s Liechtenstein have been authorized to offer securities tokens under the city’s Blockchain Act.

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