29-11-2022
Israel’s Ministry of Finance published its Report with recommendations for development of domestic regulations pertaining to the digital asset market.
The report was compiled during 2022 year, by the office of the Chief Economist, in consultation with relevant regulators and government officials, experts and representatives of the local industry, as well as regulators from other countries.
The introspection by Israel’s Ministry of Finance, culminating into the Report, was mainly driven by the fast emerging new regulatory and legislative policies of other countries, and also in anticipation of the developing views of OECD and the recently published EU guidelines regarding “crypto assets”, which saw daylight in October 2022.
The main points of the crypto recommendations are:
Removal of existing barriers and obstacles of the existing regulatory framework: clarifying government policy regarding increasing the certainty of investors in the field, inter alia, by making a decision regarding the existing license applications, increasing activity in the field of enforcement of services provided without a license, and continuing to monitor the implementation of measures to ensure the provision of adequate banking services, under the required risk management, for funds originating from digital assets.
Improvement and expansion of the existing regulatory infra-structure: regulation of powers for the Supervisor of Financial Service Providers with respect to parallel licenses granted abroad, clarifications and creation of mechanisms for paying tax for activity in digital assets for the purpose of removing barriers and increasing certainty, expanding the applicability of the Regulation of the Israel Securities Authority to assets and activities related to digital assets relating to the application of securities laws, and concentrating as much as possible the licensing and supervision powers of financial services and payment services in relation to digital assets in the hands of one regulatory entity while maintaining the principle of technological neutrality .
Creating new regulatory infrastructure: Enshrining licensing and supervision powers in law regarding the issuance and issuance of backed-up digital assets (including stablecoins) and providing financial services through them, including the creation of a mechanism that will be anchored in legislation to transfer the Bank of Israel’s supervision of digital assets with a significant prudential or monetary impact, and the establishment of an inter-ministerial committee to examine the regulation of decentralized autonomous organizations (DAO).
As to the recommendations pertaining to new taxation law and compliance, our firm YEtax has an ear on the ground – and not merely because of its expertise and close involvement with digital asset related innovative industries in Israel, but also because of the importance for Israel to facilitate the crypto industry in a pro-active fashion.
Crypto experts at YETAX:
