The Supervisor of Financial Service Providers and the Israel Securities Authority should be given more authority to oversee the industry, according to the chief economist of Israel’s country.
In order to safely encourage cryptocurrency adoption, Israel’s chief economist has compiled a list of recommendations for how policymakers should approach digital asset laws.
In a 109-page report submitted to the Priest of Money on Nov. 28, Shira Greenberg, Boss Market analyst at the Service of Money, required a more extensive administrative structure that would align exchanging stages and crypto guarantors and would grow the powers given to its monetary controllers.
Greenberg suggested that Israel should make cryptocurrency trading platforms and cryptocurrency issuers subject to more stringent licensing requirements, as well as make sure that funds derived from digital assets are managed in a more secure manner, to increase investor protection and certainty.
She also suggested that the Supervisor of Financial Service Providers be given more authority to oversee licensing regulations and create a more comprehensive taxation framework for digital asset purchases and sales.
Greenberg also recommended that the Israel Securities Authority be given more authority. He said that the authority was needed to find out if a digital asset falls under Israeli securities laws and to keep an eye on crypto payment service providers’ activities.
Greenberg suggested the establishment of an interministerial committee to examine and regulate blockchain-based decentralized autonomous organizations (DAOs) in relation to legislation, as well as the need to implement specific licensing and supervision rules for stablecoin issuers.
She added that when putting digital asset-related regulations into effect, it was crucial for legislators and policymakers to take the idea of technological neutrality into consideration.
The report “constitutes the most comprehensive and up-to-date report currently available on this issue for government use” in Israel, according to Minister of Finance Avigdor Lieberman, and he anticipates that the “report will serve as a basis for future decisions and legislation” on digital asset-related matters in the months to come.
In a recent global crypto adoption index conducted by blockchain data firm Chainalysis, Israel ranked 111th out of 146 countries, despite being referred to as a nation with a high level of technological proficiency.
In addition, Greenberg cited data in her report that states Israelis have been responsible for 21 million blockchain-based transactions, or 0.04% of all crypto transactions worldwide.
In the meantime, only 2% of Israelis claimed to own or use a cryptocurrency wallet.
Adoption appears to be increasing.On October 24, the Tel Aviv Stock Exchange (TASE) made the announcement that it would build a blockchain-based platform to offer cryptocurrency trading services.In the same month, TASE also started live tests for a pilot project that involves tokenizing digital bonds. This project is expected to be finished in the first quarter of 2023.
Finally, licenses from the government are also being issued. In September 2022, Israeli-based trading platform Bits of Gold became the first company to receive a license from the Capital Markets Authority to store digital currencies in their own secured custody wallet and offer certain services to banks related to digital assets.