Further to the regulatory activity done by all relevant parties in their areas of responsibility and authority regarding virtual assets, and in view of the development of the industry in Israel that is examining the various uses and applications based, inter alia, on distributed ledger technology (DLT) in the financial system, the regulators of the Israeli financial system believe that there is room to renew and strengthen cooperation and coordination among all regulators and the public.
The team would like to monitor developments in this area in Israel and abroad, and to examine the issues concerning the application of regulation to the various uses of the technology and their implications for economic activity, the financial markets and financial stability. The team will gather data and information for the purpose of creating a knowledge base on the issue for regulators and the public, and in order to formulate recommendations regarding the desired regulatory policy.
The team’s members, which include representatives from the Capital Market Authority, the Israel Securities Authority, the Ministry of Finance, the National Economic Council, the Israel Tax Authority, the Ministry of Justice, the Israel Money Laundering and Terror Financing Prohibition Authority, the National Cyber Bureau, and the Bank of Israel, are asking for the public’s response to the following question:
What issues should be discussed in examining the regulation of the use of virtual assets and what are the possible measures relating to those issues? In particular:
1. What are the main barriers, regulatory or otherwise, with which Israeli parties at interest dealing with virtual assets must deal if they wish to operate in Israel and offer their product to the domestic consumer? If the company has previous experience operating in Israel, we would like to know what specific barriers it has encountered.
2. What are the main barriers, regulatory or otherwise, with which Israeli parties at interest operating in the context of investing and fundraising in the area of virtual assets must deal if they wish to operate in Israel? If the company has previous experience raising funds in Israel, we would like to know what specific barriers it has encountered.
3. What are the main barriers, regulatory or otherwise, with which the consumers of virtual-asset-based applications in Israel must deal?
4. What are the risks inherent in the use of virtual assets and in activity using virtual assets?
5. What is the relevant information that regulators must gather in order to monitor developments in the industry?
6. What are the opportunities inherent in this technology for the financial sector?
7. How can this technology help in dealing with AML/CFT (Anti Money Laundering and Combatting the Financing of Terrorism) challenges?
Those interested in submitting their positions should send a summary document by electronic mail to Elazar.maor@boi.org.il. The document should be no longer than 10 pages. Responses will be received until December 31, 2018.
The Committee is permitted to respond to all or some of the responses received, or not to respond at all.
It is clarified that the Committee shall be permitted to present the data and to use the content of the position papers and their appendices for the purpose of formulating its final recommendations, and to publish them, including on the government’s websites, unless the response includes an explicit written request to limit the disclosure or use of the information contained.