The Tel Aviv Stock Exchange (TASE) has recently released a draft proposing to allow clients of non-banking institutions (NBMs) among its members to buy and sell cryptocurrencies. The move comes at a time when the crypto market has experienced a turbulent year, but with a growing demand from customers and more regulated institutions getting involved. The proposed regulations are intended to enable customers to deposit fiat money for investment in crypto assets and withdraw funds stemming from such investments.
The TASE draft seeks to expand the list of authorized activities for NBMs in order to add crypto trading. NBMs provide brokerage, investment and advisory services, and operate as intermediaries. While they can process various transactions such as the transfer of funds, they are not permitted by law to accept direct deposits from customers or act as custodians.
The exchange noted that the proposals come at the backdrop of a growing number of regulated institutions getting involved in the digital asset market. Upon their receipt, the proposal will be submitted for approval by the Board of Directors. The exchange also highlighted that this move is another step in the advancement and development of the Israeli capital market which aims to encourage innovation and competition, while mitigating the risks and protecting the customers.
The TASE call for comments was posted on Monday and it is seeking feedback on its regulatory initiative. Last week, the Bank of Israel published recommendations for regulating and supervising activities related to stablecoins in the country. In November, 2022, Israel’s Ministry of Finance issued its own guidelines for digital asset regulation. In January of this year, the Israel Securities Authority (ISA) released a draft proposal to define the legal status of cryptocurrencies.
The new rules will also enable NBMs to deal with two types of licensed companies: providers of trading services and providers of custodial services for cryptocurrencies. The exchange has stated that all this requires regulation that will mitigate various risks.
The move comes at a time when the crypto market is maturing and more and more regulated institutions are getting involved. This is a positive development for the crypto industry as it shows that the sector is gaining more legitimacy in the eyes of regulators and investors. It also signals that more countries are open to embracing the digital asset market.
The new regulations proposed by the Tel Aviv Stock Exchange may pave the way for other exchanges to follow suit and allow crypto trading. This could further open up the sector to more investors, increase liquidity and attract more institutional capital.
It remains to be seen whether the proposed regulations will be approved by the Board of Directors and if the exchange will eventually allow crypto trading. If the regulations are approved, it could be a major step forward for the crypto industry in Israel and it could lead to other countries following suit.
Do you think Israel will gradually regulate all activities in the crypto market? This is a question that many investors and industry observers are asking, and it is one that will be answered in the coming months and years. It is clear that the country is taking steps to regulate the sector, but it is still too early to tell what the full implications of this move will be. In any case, it is a positive development for the crypto industry and it could open up the sector to more investors and institutions.