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Israel's regulator has created a Committee for the development of blockchain in the country

Israel’s regulator has created a Committee for the development of blockchain in the country

The Israeli securities Commission (ISA) has created a Committee for the development of the blockchain industry in the country, and also intends to identify regulations that prevent the introduction of the latest technologies.

The regulator said that it intends to explore the practical application of distributed Ledger technology and focus on the development of platforms that issue securities based on blockchain, as well as use tokens and smart contracts. Previously, the ISA has already considered the risks associated with ICO, after which it stated the need to amend the regulation of the cryptocurrency industry in order to create an appropriate infrastructure for token shares.

The Commission stressed that distributed Ledger technology has great potential for the development of the Israeli market. In particular, blockchain can reduce trading costs and economic risks, as well as open access to the capital market for small and medium-sized enterprises.

To date, the Committee has not identified significant risks that the blockchain can carry, except for its novelty. ISA said that if blockchain-based platforms comply with regulatory rules, fight money laundering and do not violate financial stability, the regulator will take a “neutral” approach to the technology.

However, according to ISA, most of the advantages of blockchain are only theoretical, so the regulator plans to find out how the technology will “prove itself” in practice. In addition, ISA intends to improve the regulation of the cryptocurrency industry in Israel.

Since the development of capital markets is a priority for the state, the Committee will study the provisions that hinder the development of the digital market in the country. ISA also suggested attracting entrepreneurs who could provide proof of concept to simplify the implementation of blockchain in various areas of activity.

Note that the ISA has not always contributed to the development of innovation in the country. For example, two years ago, the regulator proposed to ban trading in shares of cryptocurrency companies on the stock exchanges of tel Aviv, and in August last year, investors could not pay taxes on crypto assets, as banks refused to accept funds received from trading digital currencies.