Israel’s market regulator the Israel Securities Authority (ISA) has made a recommendation to the Israeli government to create a platform where cryptocurrencies can be traded under enhanced regulation, according to Reuters.
Although the platform will be subject to enhanced regulation, it would allow companies to raise money by issuing digital tokens to investors.
The ISA has been studying the field for roughly two years. ISA chair Anat Guetta commented: “The excitement that defined the field in 2017 has cooled off, but the technology is here to stay.”
Guetta was referring to distributed ledger technology (DLT), which underpins cryptocurrencies such as Bitcoin.
Reportedly, the number of companies trading in Tel Aviv has fallen in the last decade. The ISA is now looking for a new, alternative method to attract more investors and raise initial public offerings.
Guetta believes that technological innovation can be streamlined and increase competition in the capital market. However, the challenge is to find the balance between increased competition and protecting investors.
In tandem with establishing a crypto trading platform, the committee has suggested applying securities law to cryptocurrencies. The law would need to be altered to incorporate unique disclosure demands for companies and businesses looking to issue cryptocurrencies.
The committee’s report also referenced other exchanges based in London and Australia that it is studying as examples.
The report did not offer a deadline for a final decision to be reached.
Guetta’s comments seem to advocate for blockchain and crypto tech in Israel. This should come as positive news for the country after Bitmain closed its blockchain development centre in Ra’anana last year, which saw 23 members of staff lose their jobs.
Interested in reading more crypto-related news from Israel? Discover how Coinmama founded the first crypto ATM in the country.